Penally is believed to be the birthplace of the 6th-century saint Teilo. He is sometimes described as cousin of Dewi (David), patron saint of Wales, and grandson of Ceredig, king of Ceredigion. His enthusiasm for spreading the gospel is reflected in the large number of churches dedicated to him. The town of Llandeilo, Carmarthenshire, is named after him.
This church is dedicated to St Teilo and to St Nicholas, patron saint of seafarers. An earlier church on this site was replaced by the current church, possibly in late Norman times.
Penally welcomed countless Celtic missionaries in the early years of Christianity in the British Isles. Pilgrims travelling from Brittany or Cornwall to Ireland would often come ashore at Penally, before crossing Pembrokeshire by land and then embarking again on the southern shores of Cardigan Bay.
Inside the church are two Celtic crosses, which stood outside the church for 1,000 years or more. They were moved indoors for preservation in the 21st century. Ancient interior murals were discovered, and promptly obliterated, during the church’s restoration in the 1850s.