The town of Peñamiller is a small community of less than 1,100 as of 2005, located in the west of the municipality at an altitude of 1330 meters. The town is wedged between mountains and the banks of the Extoraz River. It was founded and named by José de Escandón in the middle of the 18th century. He named it Peña Mellera as the mountain now known as Picacho just east of the town reminded him of a similar formation in the
Peñamellera Bajo in Spain. Inside and just outside the town there are many walnut trees. Just further out there are many tall cactus and buzzards can frequently be seen circling in the air riding on warm air currents. Many of the town's roads are still dirt. The main church building dates from the 19th century and the municipal palace building is one of the oldest in the town. The municipal seat has one public library called the Biblioteca Pública Municipal Lic. Benito Juárez. It offers lending of books with home delivery, research help, guided tours, story hours for children and digital services.
The most important local religious event occurs on 15 August, when the Our Lady of the Assumption is venerated. This event lasts eight days and includes pilgrimages, masses, dances, novenas and fireworks. The next most important are the events associated with the Christmas season. The annual Passion Play has been held since 1880 with the participation of at least fifty actors each year. It is held on the streets of the town, especially where there are shady walnut trees ending at the Cerro del Calvario were the crucifixion in enacted. The Feria de la Nuez, dedicated to the Archangel Michael, is held on the 29th of September. This event include sporting events, traditionals as jaripeos, a coronation of a queen and popular dance.
Handcrafts produced in the town include a tool called a guingaro, used to accomplish much of the work in the fields. They also made embroidered belts (called pitiados) as well as reed baskets and brooms and a type of overcoat.