Peñalosa turned professional in 1989. He made his debut against Fidel Jubay on May 20, 1989, and won the bout by knockout.

He captured the WBC and lineal super flyweight title with a decision win over Hiroshi Kawashima on 27 February 1997 and has defended the title three times since then.

He later lost it on points to In-Joo Cho on 29 August 1998. Two years later, he had a rematch with Cho to regain the title but again lost by controversial unanimous decision.

On 24 September 2001, he challenged Masamori Tokuyama who then succeeded Cho in being the WBC super flyweight champion. However, he lost by another controversial split decision. The two fought again on 20 December 2002 but the result was the same, in Tokuyama’s favor. Peñalosa temporarily retired that year.

Peñalosa returned to boxing two years later. He defeated Bangsaen Sithpraprom for the World Boxing Foundation (WBFo) super flyweight title on 7 November 2004.

On 17 March 2007, he took on Daniel Ponce de León who then held the WBO super bantamweight title. In the fight, Peñalosa displayed his intelligence, excellent boxing skills and defensive abilities. De León who is a knockout artist could not land a clear punch on Peñalosa. Peñalosa answered with stinging counters that frustrated De Leon. Although De Leon was the busier boxer, most of his punches landed in the air and on Peñalosa’s gloves. However, De Leon won via unanimous decision.

On August 11, 2007, the veteran Filipino boxer took on Jhonny González of Mexico for the WBO bantamweight title at the Arco Arena in Sacramento, California, California. Peñalosa went down in weight and dethroned the Mexican fighter at the 7th round.

He defended the title in Quezon City, Philippines by stopping former world title holder Ratanachai Sor Vorapin of Thailand in the eighth round on 6 April 2008.

On April 21, 2008, Peñalosa won in the game show Wheel of Fortune held in the Philippines, defeating fellow boxers Rey Bautista and Alex John Banal. The prize he earned was worth P159,000 ($3,791).

Peñalosa served as the trainer of IBF flyweight champion Nonito Donaire in 2008.

On February 21, 2009, Peñalosa took on German Meraz of Mexico at the Cebu Coliseum in Cebu City, Cebu, Philippines; the two fought in the main event of the “Battle of the Bantamweights” card. The WBO title was not at stake. The Filipino boxer won the fight by unanimous decision after 10 rounds.

He later fought on 25 April 2009, in Puerto Rico against Puerto Rican sensation Juan Manuel López for the WBO Super Bantamweight Championship. The showdown featured as a Champion versus Champion match because the two fighters were both holders of WBO World titles. Peñalosa had the bantamweight title and Lopez had the super bantamweight belt.

On 13 February 2010, Peñalosa faced Eric Morel (41-2) of Puerto Rico for the interim WBO bantamweight title at the Las Vegas Hilton in Las Vegas, Nevada. The veteran fighter trained at the Wild Card Gym in Los Angeles under the guidance of coach Freddie Roach, along with Filipino prospect Bernabe Concepcion and seven-division world champion Manny Pacquiao. The bout was part of the card named “Pinoy Power 3”, in which four other Filipino boxers fought. Peñalosa eventually lost the bout by a controversial Split Decision.

Following the fight against Morel, Peñalosa stated that he will fight for one last time against Yodsaenkeng Kietmangmee of Thailand on October 10, 2010. The Filipino pugilist also revealed that the proceeds of this match will be given to Z Gorres to help him with his medical expenses. The event, called “Golpe Golpe na Zamboanga: The Last Hurrah”, was held at the Zamboanga City Coliseum. The former world champion won the bout by TKO in the 4th round.