Penn was born in Montclair, New Jersey to an engineer father and a mother who worked as a fragrance evaluator for a perfume company; both of his parents were immigrants of Gujarati Indian ancestry. Penn is an alumnus of Howell High School and The Fine and Performing Arts Specialized Learning Center for three years. He graduated at Freehold Township High School where he attended for his senior year only. He attended the University of California, Los Angeles where he double majored in Film and Sociology. While at UCLA, he was a founding member of the underground intellectual society, "6 South." Due to creative differences the group disbanded but are currently considering a reunion. He also played a big role in the on-campus club, Sangam, which has also disbanded. Penn has been a vegetarian since birth.

Penn's feature film debut came in 1998 in Express: Aisle to Glory. He has since appeared in American Desi, National Lampoon's Van Wilder, Malibu's Most Wanted, A Lot Like Love, Harold and Kumar Go to White Castle, Dude, Where's the Party?, Love Don't Cost a Thing, Superman Returns, National Lampoon's Van Wilder: The Rise of Taj, Epic Movie, The Namesake, and will be a part of the upcoming Harold & Kumar End Up in Gitmo. Penn was featured in the The Lonely Island's rejected Awesometown MTV pilot music video, along with his friend Brandon Routh (who played Superman in Superman Returns). Penn also played one of Lex Luthor's henchmen in Superman Returns.

Penn says that he chose the stage name Kal Penn (from Kalpen Suresh Modi) as a lark: “Almost as a joke to prove friends wrong, and half as an attempt to see if what I was told would work (that anglicized names appeal more to a white-dominated industry), I put ‘Kal Penn’ on my resume and photos." His audition callbacks rose by 50%. Penn has stated that he prefers his birth name and uses "Kal Penn" only for professional purposes.

In January 2007, Penn appeared in the first four episodes of the sixth season of 24 as Ahmed Amar, a villain. Penn says he nearly turned down the role due to personal ethics, stating, "I have a huge political problem with the role. It was essentially accepting a form of racial profiling. I think it’s repulsive. But it was the first time I had a chance to blow stuff up and take a family hostage. As an actor, why shouldn’t I have that opportunity? Because I'm brown and I should be scared about the connection between media images and people's thought processes?"

Also in January 2007, he appeared in the spoof comedy Epic Movie as well as the television show Law & Order: Special Victims Unit, where he played a recognition-starved rapist and murderer. In May 2007, Penn received the Asian Excellence Award for Outstanding Actor for his performance in The Namesake.

In spring 2008, Penn will serve as visiting professor of Asian American Studies at the University of Pennsylvania. He will teach two courses: “Images of Asian Americans in the Media,” and “Contemporary American Teen Films.”