Penrose was born in Philadelphia as the fifth of seven sons in a prominent family with deep roots in the city. His father, Richard Alexander Fullerton Penrose, was a physician and founder of the Children's Hospital of Philadelphia. Spencer attended Harvard University, graduating at the bottom of his class, while his brothers distinguished themselves academically and entered the professions. His ambitions lay elsewhere: he headed west after graduation, setting himself up in Las Cruces, New Mexico, where a succession of business ventures gave him early commercial experience before a better opportunity emerged.
In 1892, his brother Richard, by then an accomplished geologist, and childhood friend Charles L. Tutt wrote to Penrose about a potential gold rush at Cripple Creek, Colorado. Penrose and Tutt formed a partnership built around the Cash on Delivery Mine, one of Cripple Creek's most productive operations. They sold the mine in 1895 for 250,000 dollars and reinvested in ore processing, establishing the Colorado-Philadelphia Reduction Company in Old Colorado City alongside Miller Charles Mather MacNeill.
The partnership's most transformative venture followed a suggestion from metallurgist Daniel C. Jackling, who argued that a massive but low-grade copper deposit in Bingham Canyon, Utah, could be profitably mined at industrial scale despite containing only two percent copper. Penrose formed the Utah Copper Company in 1903 and engineered a milling operation that most experts had considered impossible. The enterprise generated the fortune that would underpin Penrose's later philanthropic and infrastructure work in Colorado Springs.
Returning to Colorado Springs as a wealthy man, Penrose partnered with Charles Tutt to build a motor road to the 14,115-foot summit of Pikes Peak. Their aim was promotional: a tourist highway to the summit would bring visitors to the region and support Penrose's planned luxury resort. The road was completed on 1 August 1916 at a cost of approximately 283,000 dollars.
The same year the highway opened, Penrose organised the first motor race to the summit. The inaugural event was won by Rea Lentz with a time of 20:55.60, and a motorcycle class was also held. The Penrose Trophy was awarded annually through 1924. The race has continued every year since 1916, barring interruptions during the world wars, and is now known as the Broadmoor Pikes Peak International Hill Climb. It stands as the second-oldest motor car race in the United States and has become one of the most distinctive hillclimb events in global motorsport.
Penrose's vision for Colorado Springs extended beyond the mountain highway. Having married widow Julie Villiers McMillan in 1906 after travels in Europe that inspired him with grand hotel culture, he acquired a site outside Colorado Springs in 1916 and commissioned the architectural firm Warren and Wetmore — known for Grand Central Terminal in New York — to design The Broadmoor Hotel. The hotel opened on 29 June 1918 at a cost exceeding three million dollars and immediately established itself as one of America's premier resort destinations, drawing wealthy visitors from across the country.
Penrose and his wife Julie were sustained philanthropists in Colorado Springs. Their supported projects included the Cheyenne Mountain Zoo, the Will Rogers Shrine of the Sun, the Colorado Springs Fine Arts Center, and the Glockner-Penrose Hospital. On 17 December 1937 they founded the El Pomar Foundation with an initial combined gift of 21 million dollars. The foundation, whose mission is to enhance the wellbeing of the people of Colorado, had assets exceeding 600 million dollars by the early twenty-first century and has distributed more than 1.2 billion dollars in grants.
Penrose died in 1939, two years after establishing El Pomar. He was survived by Julie, who served as president of the foundation until her own death in 1956. Both are entombed at the Will Rogers Shrine of the Sun on Cheyenne Mountain. He was inducted into the Pikes Peak Hill Climb Museum Hall of Fame in 1997 and into the Hall of Great Westerners of the National Cowboy and Western Heritage Museum in 2001.