According to the United States Census Bureau, the CDP has a total area of 2.1 square miles (5.4 km²), all of it land.
As of the census of 2000, there were 1,387 people, 530 households, and 383 families residing in the CDP. The population density was 659.3 people per square mile (255.0/km²). There were 561 housing units at an average density of 266.7/sq mi (103.1/km²). The racial makeup of the CDP was 93.4% White, 0.8% African American, 0.6% Native American, 0.7% Asian, 5.5% from other races, and 2.4% from two or more races. Hispanic or Latino of any race were 12.5% of the population.
There were 530 households out of which 32.8% had children under the age of 18 living with them, 55.3% were married couples living together, 12.1% had a female householder with no husband present, and 27.7% were non-families. 20.6% of all households were made up of individuals and 9.4% had someone living alone who was 65 years of age or older. The average household size was 2.62 and the average family size was 3.03.
In the CDP the population was spread out with 27.0% under the age of 18, 4.8% from 18 to 24, 26.2% from 25 to 44, 26.3% from 45 to 64, and 15.6% who were 65 years of age or older. The median age was 40 years. For every 100 females there were 95.9 males. For every 100 females age 18 and over, there were 93.5 males.
The median income for a household in the CDP was $35,962, and the median income for a family was $37,115. Males had a median income of $33,068 versus $21,133 for females. The per capita income for the CDP was $16,582. About 9.2% of families and 13.0% of the population were below the poverty line, including 22.7% of those under age 18 and 6.6% of those age 65 or over.
In the state legislature Penn Valley is located in the 4th Senate District, represented by Republican Sam Aanestad, and in the 4th Assembly District, represented by Republican Ted Gaines. Federally, Penn Valley is located in California's 4th congressional district, which has a Cook PVI of R +11 and is represented by Republican John Doolittle.