The municipality of Penamacor is located in the extreme north-west of Beira Baixa, in the historic district of Castelo Branco. It is bordered to the north by the municipality of Sabugal, to the south by Idanha-a-Nova, to the west by Fundão and to the east by Extremadura. Its landscape is diverse as it lies in a transition zone between the Guarda plateau and the Castelo Branco plain: a mountainous area to the north (it is part of the Serra da Malcata nature reserve) and a relatively flat area to the south punctuated by reliefs.

The municipality is made up of nine parishes: Águas, Aldeia do Bispo and Aldeia de João Pires (Union of Parishes); Bemposta and Pedrógão (Union of Parishes); Aranhas; Benquerença; Meimoa; Meimão; Penamacor; Salvador; Vale da Senhora da Póvoa. One of the problems in the municipality is access and the lack of transportation, particularly by train, which makes travelling difficult and has contributed to isolation.

The municipality, located in the district of Castelo Branco, covers an area of 564 km2. In 2022, it had 4745 inhabitants (INE data), corresponding to a population density of 8.5 inhabitants/km2. There has been a continuous population decline since the 1950s, due to migratory flows (emigration and internal migration to the coast), resulting in a phenomenon of depopulation and progressive ageing. Despite the construction of the Neighbourhood for Poor Families, plans to build basic housing in Penamacor did not materialise until the 90s. Although it has been difficult to retain inhabitants - especially young people - due to the limited job opportunities, in the last decade Penamacor has become a destination for international people from different parts of the world, who settle both in the town and on farms scattered around the parishes. There is also a significant Jewish community. On the other hand, there are close links with Spain.

The productive sector is mainly linked to local natural resources, with agroforestry being the most important economic sector, particularly cork and olive production and livestock farming. Historically, agriculture was the population's main source of income. Industry is practically limited to the processing of agricultural products and the extraction of wood. The largest company in the municipality manufactures plastic packaging. Trade is uncompetitive compared to nearby urban centres and has been in decline in recent decades; there is some employment in the restaurant and construction sectors. The municipal market is one of the most prominent buildings of the second half of the 20th century; today it only has a few shops, reflecting the evolution of the food trade in this area. The valorisation and simultaneous modernisation of local traditions can be seen, for example, in the Madeiro held at Christmas time, which has gained tourist interest.

The Urbanisation Plan drawn up by architect José de Almeida Segurado in 1959 was never implemented. However, there was investment in public facilities in the 1950s and 1960s, with the construction of security-related buildings such as the Police station, the Tax Guard station and the National Republican Guard. The Post Office was given its own building at the end of the 1970s, when progress was made on the construction of the first phase of the Fire Station. In the following decade, investment was made in the provision of buildings for the municipality's parish councils, as in the case of Meimoa, Pedrogão de São Pedro, Bemposta and Salvador.

The construction of the Casa do Povo (People's House), which is still an important community and cultural centre today, met the need for medical assistance and socialising felt in the last century.

Although public investment in the network of primary schools has been felt in the municipality - in the cases of Aldeia do Bispo, Aldeia de João Pires, Meimoa, among others - the establishment of the Externato de Nossa Senhora do Incenso was a private initiative. A prefabricated building dating from the 1980s sought to respond to the reform of compulsory education. The centralisation of education in the county seat meant that the primary schools in the parishes lost their function.