There are several theories as to the origin of the name "Pensnett". The first is the from the Anglo-Saxon word "penn" meaning swan due to the wild birds in the area, the second and more likely is from the old English word "pen" meaning a piece of woodland on a hill.

Pensnett Chase, as a source of minerals and iron-ore deposits, was mined as early as the 13th century. The township of Pensnett, which lies to the eastern edge of the chase, owes its origins to the settlements of miners and charcoal burners within the area. In an 19th century history of the area it states that: 'The Shutt End district has several coal and iron works, and the village of Tansy Green, two miles SW of Dudley".

St Mark's Church, Pensnett was built between 1846 and 1849, on the steep slopes of Barrow Hill, to serve the new district parish of Pensnett. St Mark's is a handsome cruciform structure, in the early pointed style, with lancet windows. Lord Ward was made a patron of the church and it was he who met half of the £13,000 cost.

In the late 19th century, Primative Methodists at Shutt End decided to secede from the Brierley Hill circuit. They founded an independant Methodist Church, opposite Victoria Street, Commonside. The new church was opened for worship on the 29th of July, 1894.

'Corbyn's Hall' was built in the 16th century by the Corbyn family. The Corbyn's were at that time the Pensnett gentry. In later years the hall was owned by the Gibbons family, who were local iron masters and coal producers. Unfortunatly the mining that brought wealth to this area also caused severe damage to the hall, due to subsidence. It was evident that the hall's days were numbered and in 1916 it was finally demolished.

'Shutt End House', later known as 'The Plantation', was built in 1760. It stood on 12 acres of land in Kingswinford Road and was originally a substantial farmhouse. From 1916 it was owned by the Plant family but in 1960 it was sold and demolished to make room for about 40 new homes.

During the Industrial Revolution the Pensnett area was a late developer when compared to other parts of the Black Country, due mainly to the fact it had no waterways linking it to other areas of the country. The Pensnett railway opened in 1829 and paved the way for the transportation of raw materials and finished goods to the growing number of canals in Stourbridge, Wall Heath (at Ashwood) and Birmingham.