PENELOPE performs Monte Carlo simulation of coupled electron-photon transport in arbitrary materials and complex quadric geometries. A mixed procedure is used for the simulation of electron and positron interactions (elastic scattering, inelastic scattering and bremsstrahlung emission), in which ’hard’ events (i.e. those with deflection angle and/or energy loss larger than pre-selected cutoffs) are simulated in a detailed way, while ’soft’ interactions are calculated from multiple scattering approaches. Photon interactions (Rayleigh scattering, Compton scattering, photoelectric effect and electron-positron pair production) and positron annihilation are simulated in a detailed way.