The name "Penang" comes from the modern Malay name Pulau Pinang, which means island of the areca nut palm (Areca catechu, family Palmae). The name Penang can refer either to the island of Penang or the state of Penang. The capital of Penang state is George Town. More specifically, George Town is also called Tanjung in Malay. Penang Island is simply Pulau Pinang and Penang state is Negeri Pulau Pinang in Malay.

Penang is severally known as "The Pearl of the Orient" and "Pulau Pinang Pulau Mutiara" (Penang Island of Pearls).