Penngrove is a census-designated community that began as a Northwestern Pacific Railroad freight station and an olive tree plantation in the late 1800s. Nearby Sonoma Mountain was an ancient active volcano that left the area with large amounts of obsidian and petrified wood and a unique soil type that is mostly clay-like adobe. This may have been the reason or partially the reason why the olive trees wound up producing olives that were inedible. The plantation owners were the Penn brothers, who named their plantation Penn's Grove; when the olive trees failed, the brothers destroyed the olive tree groves and sold the land. The name remained, however, until it was altered by the U.S. Postal system because there was another postal station named Penn's Grove in New Jersey. Today the town is divided by Lichau Creek, which flows through the town parallel to the railroad tracks and into Petaluma River, then later into San Pablo Bay.