Penny is Inspector Gadget's brilliant niece who often helped him in his cases, sometimes against his will. She was portrayed by Michelle Trachtenberg in the first film and Caitlin Wachs in the sequel. She served as the primary heroine in the TV show, and the secondary heroine in the two films, behind Brenda Bradford (first) and G2 (second).
She asks about the letter concerning his application to become a full rank police officer, she looks at it and he tells her that two years experience isn't enough to be a cop.
Brown is concerned that being a security guard isn't the best job because of all the brilliant jobs her classmates' parents have and thinks he can do more as a real police officer. Penny assures him that she is proud of him no matter what job he has.
After Brown has an accident involving an encounter with Sanford Scolex, she watched as he is rebuilt by Dr. Brenda Bradford as the first Cyborg Police Inspector for the Riverton Police Department: Inspector Gadget. She then helps him get ready for a celebration party of his acceptance. Penny knows that he has an infatuation for Brenda and tells him to loosen up a bit and be cool when he sees her.
Presumably after being picked up from school the next day, Penny helps Gadget with his case on the murder of Artemus Bradford (Brenda's father) by noticing a Scolex Industries truck similar to initials "SI" that Gadget found on a small circular piece of metal which makes him realize that Scolex (now Dr. Claw) was behind the murder.
They drive to Scolex Industries. Gadget goes inside to warn Brenda leaving Penny and Brain in the Gadgetmobile to take them home. When they arrive there, they meet Brenda who has found out that Claw killed her father and find out that something has happened to Gadget and go after him using the Gadgetmobile's tracking system.
They find him at a rubbish dump where he had been placed after he was deactivated by Claw. Even though his Neuron Synapse Amplifier chip, which was the main source of his functioning body, is gone, a tearful Penny says that he has the heart to still function by himself. Suddenly after a kiss from Brenda, he begins to move again much to their joy.
Gadget and Brenda go after Claw and drop Penny and Brain off at home. Penny takes the bus and arrives at Scolex Industries for evidence involving Claw.
Inside she tells Brain to split up and go in different direction. She finds Sykes, one of Claw's henchmen, trying to flush a cybernetic foot that is evidence in his boss's crime. He aims his gun at her, but she ends up persuading him that a life of crime isn't right for him and gains evidence that Claw made an evil version of Gadget to terrorize Riverton.
Later after Chief Quimby arrives after Gadget defeats Claw for his crimes against the city, Penny arrives with a tearful Sykes who admits everything, much to the astonishment of the now caged Claw. She is given a thumbs up sign by Gadget and she returns it.
She leaves with Gadget (who is now dubbed a hero), Brenda, and Brain and heads back home. During the closing credits, she is seen testing her latest invention of her communicator watch with Brain who responds in a human voice.
- Lindsay Lohan turned down the role of Penny, due to working on her first movie, Disney's The Parent Trap (1998).