AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 2001
                                                   REGISTRATION NO. 333-
                                                                        --------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933
                             -----------------------

                     PENN ENGINEERING & MANUFACTURING CORP.
                     --------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                     23-0951065
--------------------------------         ---------------------------------------
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                                  P.O. Box 1000
                           Danboro, Pennsylvania 18916
                                 (215) 766-8853
          -------------------------------------------------------------
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)


                 Kenneth A. Swanstrom, Chairman of the Board and
                             Chief Executive Officer
                     Penn Engineering & Manufacturing Corp.
                                  P.O. Box 1000
                           Danboro, Pennsylvania 18916
                                 (215) 766-8853
            ---------------------------------------------------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)


                                    Copy to:
                          Frederick W. Dreher, Esquire
                          Duane, Morris & Heckscher LLP
                             4200 One Liberty Place
                      Philadelphia, Pennsylvania 19103-7396
                                 (215) 979-1234
                               -------------------

     Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.

     If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [X]

     If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]

     If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

     If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

     If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

                         ------------------------------
<TABLE>
<CAPTION>

                                               CALCULATION OF REGISTRATION FEE

========================================================================================================================
       Title of each                                  Proposed maximum          Proposed maximum
    class of securities           Amount to               offering                 aggregate               Amount of
     to be registered          be registered(1)       price per unit(2)         offering price(2)       registration fee
------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                         <C>                     <C>                       <C>
Common Stock,
$.01 par value                1,000,000 shares            $16.50                  $16,500,000               $4,125
========================================================================================================================

</TABLE>

(1)  This registration statement registers shares to be offered and sold under
     the Company's Dividend Reinvestment and Stock Purchase Plan. This
     registration statement also registers such additional shares as may be
     required to be issued under the Plan in the event of a stock dividend,
     stock split, reclassification, or other similar event.

(2)  Estimated solely for the purpose of calculating the registration fee
     pursuant to Rule 457(c) under the Securities Act of 1933 based on $16.50,
     the average of the reported high and low sales prices of the Common Stock
     of the Company on the New York Stock Exchange on November 13, 2001.

                             -----------------------



<PAGE>

     [CIRCLE GRAPHIC OMITTED]

     DIVIDEND
     REINVESTMENT AND
     STOCK PURCHASE
     PLAN


                                             [CIRCLE GRAPHIC OMITTED]

                                             [PENN ENGINEERING LOGO]

                                             This Plan gives you a convenient,
                                             systematic way to purchase our
                                             Common Stock

                                             You can increase your ownership
                                             by reinvesting dividends and by
                                             making voluntary cash purchases
                                             with all fees paid by the Company
                                             other than a $5.00 service charge
                                             on voluntary cash purchases

                                             November 15, 2001



--------------------------------------------------------------------------------
                                   PROSPECTUS

          Neither the Securities and Exchange Commission nor any state
           securities commission has approved or disapproved of these
     securities or passed upon the adequacy or accuracy of this prospectus.
            Any representation to the contrary is a criminal offense.
--------------------------------------------------------------------------------


<PAGE>


                         [Penn Engineering Logo Omitted]


                  DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
                        1,000,000 Shares of Common Stock

     This Prospectus relates to 1,000,000 shares of Common Stock of
PennEngineering (the "Company") being offered to the stockholders of the Company
in connection with the Company's Dividend Reinvestment and Stock Purchase Plan
(the "Plan"). The Plan provides stockholders with a convenient and economical
method of increasing their equity ownership in the Company by investing cash
dividends and voluntary cash payments in additional shares of the Company's
Common Stock (non-voting) without paying any brokerage commissions or
administrative fees other than a $5.00 service charge each time a voluntary cash
purchase is made under the Plan. This Plan will commence on November 15, 2001.

     The Plan permits dividends on the Company's Common Stock and Class A Common
Stock to be reinvested to purchase additional shares of Common Stock beginning
on any dividend payment date. Stockholders may also make voluntary cash payments
at any time of not less than $50 per month or more than $3,000 per month to
purchase shares of Common Stock. Voluntary cash payments will be invested in
Common Stock as often as monthly as described in this Prospectus. No shares of
Class A Common Stock may be purchased through the Plan. A participant may make
voluntary cash payments whether or not the participant authorizes the
reinvestment of dividends. Shares of Common Stock purchased under the Plan will
be either shares purchased on the open market or shares purchased from the
Company.

     Amounts are invested at a price equal to (a) in the case of shares
purchased on the open market for allocation to the accounts of the Plan
participants as of an investment date, the weighted average price of the shares
of Common Stock purchased by the Plan administrator for that investment date or
(b) in the case of shares purchased from the Company, the average of the closing
prices of the Common Stock on the New York Stock Exchange for the five trading
days preceding the 15th day of the month. Any brokerage commissions resulting
from open market purchases will be paid by the Company.

     Stockholders electing to participate in the Plan may also deposit
certificates representing shares of Common Stock held outside the Plan into the
Plan for safekeeping purposes and sell shares of Common Stock credited to their
accounts through the Plan.

     Stockholders who elect not to reinvest their dividends will continue to
receive cash dividends, as and when declared.

     This Prospectus sets forth the provisions of the Plan and, therefore, it is
recommended that participants in the Plan retain this Prospectus for future
reference. The Plan is administered by First Union National Bank, Equity
Services Group ("First Union"), at the expense of the Company.

                                 ---------------


<PAGE>



                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

     The following documents filed with the Securities and Exchange
Commission by the Company are hereby incorporated in and made a part of this
Prospectus by reference:

     (a) The Company's Annual Report on Form 10-K for the year ended December
31, 2000;

     (b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2001, June 30, 2001 and September 30, 2001; and

     (c) The description of the Company's Common Stock set forth in the
Company's Registration Statement on Form S-2 under the caption "Description of
Capital Stock" filed with the Commission under the Securities Act of 1933 on May
22, 1996.

     All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part of this Prospectus from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference in this Prospectus shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

     The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all documents incorporated in this
Prospectus by reference, other than exhibits to such documents unless such
exhibits are specifically incorporated by reference in such documents. Written
requests should be directed to:

                                Richard F. Davies
                                    Treasurer
                                 PennEngineering
                                  P.O. Box 1000
                           Danboro, Pennsylvania 18916
                                 (215) 766-3605


                                       2

<PAGE>

                                   THE COMPANY

     PennEngineering provides value-added solutions to leading worldwide
manufacturers of telecommunications, electronics, computers, and automobiles.
The Company operates in three distinct areas: manufacture and sale of PEM(R)
specialty fasteners, manufacture and sale of Pittman(R) dc motors, and
distribution of fastening and related items. PennEngineering(R) products are
used by Fortune 500 and 1000 companies in over 40 countries.

     The Company was organized in 1942 as a Delaware corporation under the name
Penn Engineering & Manufacturing Corp. and does business under the name
PennEngineering. PennEngineering is a global company headquartered in Danboro,
Pennsylvania with additional facilities in Harleysville, Pennsylvania,
Winston-Salem, North Carolina, Kent, Ohio, Oxnard, California, Doncaster,
England, Galway, Ireland, and Singapore.

     The Company's principal executive offices are located at 5190 Old Easton
Road, Danboro, Pennsylvania 18916, and its telephone number is (215) 766-8853.

     PEM(R) Fastening Systems

     PEM(R) brand self-clinching fasteners are used in communications equipment,
computer cabinetry, power supplies, instrumentation, and industrial controls.
This division includes the PEMSERTER(R) Systems segment, which develops and
sells automated installation equipment for the rapid, accurate installation of
PEM(R) fastener products. Through Company-owned and independent distributors,
the Company's fastener products are stocked and sold in 40 countries of the
world.

     Atlas Engineering, acquired in April 2000, designs, manufactures, and sells
blind threaded rivets for applications where only one side of a section is
accessible. Atlas' fasteners are used extensively in automotive, aerospace,
appliance, outdoor equipment, and other markets where strong, reliable,
threaded, front-side attachment is required.

     Pittman(R) dc motors

     High-performance permanent magnet brush-commutated dc and brushless dc
(BLDC) motors are manufactured by the Pittman division and are used in
electronic, medical, data storage, and office automation equipment.

     Distribution

     The Arconix Group, created in 1999, includes Arconix/USA, Arconix/UK, and
Arconix/Singapore. It distributes fastening and related products and offers
logistical and inventory management services within their respective domestic
territories.

                                    THE PLAN

     The Plan provides stockholders of the Company with a convenient and
economical method of investing cash dividends paid on their Common Stock and
Class A Common Stock in additional shares of Common Stock and making voluntary
cash purchases of Common Stock without paying any brokerage commissions or
administrative fees other than a $5.00 service charge each time a voluntary cash
purchase is made.

                                       3

<PAGE>

     Each participant in the Plan may have the cash dividends paid by the
Company on the participant's shares of Common Stock or Class A Common Stock
automatically reinvested in additional shares of Common Stock and may make
voluntary cash payments of not less than $50 per month or more than $3,000 per
month to purchase shares of Common Stock. No shares of Class A Common Stock may
be purchased under the Plan. A participant may make voluntary cash payments
whether or not the participant in the Plan has authorized the reinvestment of
cash dividends. Stockholders electing to participate in the Plan may also
deposit certificates representing shares of Common Stock held outside of the
Plan into the Plan for safekeeping and sell such book-entry shares of Common
Stock credited to their account through the Plan. Stockholders who do not elect
to reinvest their dividends will continue to receive cash dividends by check as
and when such dividends are declared and paid.

     As explained below, the cash dividends and any voluntary cash payments of a
participant will be applied by First Union, as agent, (see Item 3) to the
purchase of shares of Common Stock at a purchase price determined in the manner
set forth in Item 13. The Company will pay most expenses incurred in connection
with such purchases, including any brokerage commissions incurred as a result of
purchases of shares in the open market. Upon the sale of book-entry shares
credited to the participant's account by First Union, the participant must pay
applicable brokerage commissions and administrative fees. See Items 9 and 22.

     The Company has reserved 1,000,000 shares of Common Stock for use under the
Plan.

                             DESCRIPTION OF THE PLAN

     The following is a description of the provisions of the Plan.

1.   PURPOSES OF THE PLAN

     The purposes of the Plan are to (a) provide stockholders of the Company
with a simple and convenient method of investing cash dividends paid in shares
of Common Stock and making voluntary cash purchases of shares of Common Stock
without payment of any brokerage commissions or administrative fees other than a
$5.00 service charge each time a voluntary cash purchase is made and (b) provide
the Company with additional funds for general corporate purposes. No shares of
Class A Common Stock may be purchased under the Plan.

2.   ADVANTAGES TO PARTICIPANTS

     Participants may reinvest the dividends paid on their Common Stock and
Class A Common Stock to purchase additional shares of Common Stock and may make
voluntary cash purchases of shares of Common Stock without paying any brokerage
commissions or administrative fees other than a $5.00 service charge on any
voluntary cash purchases. See Item 9. A participant's funds are fully invested
in Common Stock through the purchase of whole shares and fractional shares.
Quarterly statements of account provide participants with a record of each
transaction. See Item 19.

     Participants may also deposit Common Stock certificates, at no cost, in the
Plan for safekeeping and to facilitate the transfer or sale of shares of Common
Stock through the Plan in a convenient and efficient manner. See Item 17. A
participant may direct the agent to transfer, at no cost, all or a portion of
the shares of Common Stock held in a participant's account including those
shares deposited into the Plan for safekeeping. See Item 16. A participant may
direct the agent to sell shares of Common Stock held in the participant's


                                       4

<PAGE>


account for which the participant must pay applicable brokerage commissions and
administrative fees. See Item 18.

3.   ADMINISTRATION OF THE PLAN

     First Union administers the Plan and purchases shares of Common Stock as
the agent for the Plan. The shares of Common Stock acquired by the agent will be
either purchased from the Company or purchased on the open market, as the
Company determines in its sole discretion from time to time. In purchasing
shares on the open market, the agent will have, consistent with applicable
securities laws and regulations, absolute discretion to determine the volume,
timing, and price of such purchases. If you decide to participate in the Plan,
the agent will keep a continuous record of your participation in the Plan and
send you a statement of your account under the Plan after each purchase
affecting your account. Shares purchased through the Plan will be credited in
book-entry form to your account. You may deposit your Common Stock certificates
for conversion to book-entry shares, which will be credited to your account.
Doing so will relieve you of the responsibility for the safekeeping of multiple
certificates for shares purchased and protect you against loss, theft, or
destruction of stock certificates.

     First Union may be contacted as follows:

     CORRESPONDENCE

     All correspondence and inquiries relating to the Plan should be mailed to:

                  First Union National Bank
                  Equity Services Group, 3C3
                  1525 West W.T. Harris Blvd.
                  Charlotte, NC  28288-1153

     Please be sure to include a reference to PennEngineering in your
correspondence, your stockholder account number and taxpayer identification
number (social security number), and a day-time telephone number where you may
be contacted during normal working hours to facilitate a prompt response.

     TELEPHONE

     Shareholder Customer Service: (800) 829-8432

     Outside the United States: (704) 590-0394

     Customer Service Representatives are available from 9:00 a.m. - 5:00 p.m.,
eastern time, each business day.

     INTERNET

     First Union's Internet address is "http://www.firstunion.com/corptrust".
Messages forwarded on the Internet will be responded to promptly.

4.   PERSONS ELIGIBLE TO PARTICIPATE

     Any registered holder of Common Stock or Class A Common Stock or
participant in the Company's Employee Stock Purchase Plan is eligible to
participate in the Plan, provided that (a) such stockholder or Employee Stock
Purchase Plan participant completes an enrollment authorization form, as
described in Item 7, and (b) in the case of citizens or residents of a country
other than the United States, its territories, and posses-


                                       5

<PAGE>


sions, participation would not violate local laws applicable to the Company, the
Plan, and the participant. Dividends paid on Common Stock and Class A Common
Stock will be reinvested only in shares of Common Stock. No shares of Class A
Common Stock may be purchased under the Plan.

5.   BECOMING A PARTICIPANT

     Registered holders of either or both Common Stock and Class A Common Stock
and participants in the Company's Employee Stock Purchase Plan may join the Plan
at any time after completing and signing the enrollment authorization form
provided by First Union, as described in Item 7, and returning it to First
Union. A postage-paid envelope will be provided for this purpose. Requests for
copies of enrollment authorization forms and this Prospectus should be made in
writing, by telephone or through the Internet to the address, telephone number,
or Internet address listed in Item 3. Record holders of Common Stock and Class A
Common Stock should be sure to sign their name(s) on the enrollment
authorization form exactly as their name(s) appear on their enrollment
authorization form.

     A beneficial owner, i.e., a stockholder whose shares are held in nominee
name by a bank, broker, or other person, must (a) become a record holder (i.e.,
a stockholder who is registered on the books of the Company by having such
shares transferred into the stockholder's name) or (b) make arrangements with
the broker, bank, or other nominee to participate in the Plan on the
stockholder's behalf.

     Any person or entity will become a participant only after the participant
fulfills the above prerequisites for participation and a properly completed
enrollment authorization form has been received and accepted by First Union.

     Stockholders are cautioned that the Plan does not represent a change in the
Company's dividend policy or a guarantee of future dividends, which will
continue to depend upon the Company's earnings, financial condition, and other
factors.

6.   PARTICIPATION BY EMPLOYEES WHO OWN SHARES THROUGH THE COMPANY'S EMPLOYEE
     STOCK PURCHASE PLAN

     An employee who participates in the Company's Employee Stock Purchase Plan
can elect to participate in the Plan by completing an enrollment authorization
form and returning it to First Union. Participants in the Company's Employee
Stock Purchase Plan need not be registered holders of either Common Stock or
Class A Common Stock to participate in the Plan.

7.   THE ENROLLMENT AUTHORIZATION FORM

     The enrollment authorization form specifies the method by which an eligible
stockholder or participant in the Company's Employee Stock Purchase Plan elects
to participate in the Plan. If the "Full Dividend Reinvestment" box is checked,
then First Union will invest in shares of Common Stock (a) all of the
participant's cash dividends on both shares of Common Stock and Class A Common
Stock registered in the participant's name in stock certificate form, all
book-entry shares credited to the participant's account, and any shares held
under the Company's Employee Stock Purchase Plan and (b) any voluntary cash
payments made by the participant.

     If the "Partial Dividend Reinvestment" box is checked, the participant must
specify, in the box provided for that purpose, the number of shares of Common
Stock and/or Class A Common Stock or any shares held under the Company's
Employee Stock Purchase Plan on which cash dividends will be sent to the
participant.

                                       6

<PAGE>


The number of shares specified in the box includes shares registered in the
participant's name in stock certificate form, book-entry shares credited to the
participant's account, and any shares held under the Company's Employee Stock
Purchase Plan. First Union will invest in shares of Common Stock (a) the cash
dividends on the remainder of shares registered in the participant's name in
stock certificate form, book-entry shares credited to the participant's account,
and any shares held under the Company's Employee Stock Purchase Plan and (b) any
voluntary cash payments made by the participant.

     If the "Voluntary Cash Payments Only (No Dividend Reinvestment)" box is
checked, then the Company will send directly to the participant cash dividends
on both shares of Common Stock and Class A Common Stock registered in the
participant's name in stock certificate form, book-entry shares credited to the
participant's account, and any shares held under the Company's Employee Stock
Purchase Plan, but First Union will invest the participant's voluntary cash
payments in shares of Common Stock. Under the Plan, dividends will be
reinvested, paid in cash, or both, as designated on the enrollment authorization
form until a participant specifies otherwise.

8.   CHANGING DIVIDEND REINVESTMENT OPTIONS

     Participants may change their dividend reinvestment option from that
previously selected at any time by telephoning First Union or by completing and
signing a new enrollment authorization form and returning it to First Union. A
change in the reinvestment of cash dividends will be effective on the next
succeeding dividend payment date.

9.   COSTS AND EXPENSES UNDER THE PLAN

     Participants will not be charged any brokerage commissions or other
fees with respect to purchases of Common Stock under the Plan with reinvested
dividends. There will be a service charge of $5.00 each time a voluntary cash
purchase is made under the Plan.

     A participant who requests that First Union sell shares of Common Stock
held in the participant's account in the Plan will pay the applicable brokerage
commissions, a service fee, and any other costs incurred in connection with such
sale. See Item 18. All other costs of administration of the Plan will be paid by
the Company.

10.  SOURCE OF COMMON STOCK PURCHASED UNDER THE PLAN

     Plan shares will be purchased either directly from the Company, which
shares will be either authorized but unissued shares or shares held in the
treasury, or on the open market or any combination of the foregoing, as the
Company determines from time to time.

11.  TIMING OF PURCHASES UNDER THE PLAN

     Purchases for the account of participants in the Plan with respect to
reinvestment of dividends will be made on the applicable dividend payment dates,
currently on or about January 15, April 15, July 15, and October 15. In months
in which the Company makes dividend payments, voluntary cash contributions
received by the 10th of the month will be combined with and invested on the
dividend payment date with any dividend payment to be reinvested. Voluntary cash
contributions received by the 10th day of other months will be invested on the
15th day or, if the 15th is not a trading day, the first trading day thereafter
in that month. See Item 13.


                                       7

<PAGE>


     First Union will apply a participant's cash dividend paid on Common Stock
or Class A Common Stock and any voluntary cash contributions to purchase whole
and fractional shares of Common Stock and credit the shares to such
participant's account. Dividends on all shares held by First Union in a
participant's account will also be reinvested to purchase additional shares of
Common Stock. Only shares of Common Stock may be purchased under the Plan, and
no shares of Class A Common Stock may be purchased under the Plan. Therefore,
dividends paid on Class A Common Stock held by a participant in the Plan will be
invested in shares of Common Stock under the Plan.

12.  NUMBER OF SHARES PURCHASED FOR EACH PARTICIPANT

     The number of shares purchased for each participant is dependent on the
amount of a participant's dividends and/or voluntary cash contributions to be
invested and the price per share of the Common Stock. Each participant's account
will be credited with the number of shares, including fractions computed to no
less than three decimal places, equal to the total amount invested divided by
the applicable purchase price per share. See Item 13.

13.  THE PRICE OF SHARES PURCHASED UNDER THE PLAN

     Shares of Common Stock purchased through the Plan directly from the Company
will be purchased at the current market price, which is deemed to be the average
closing prices for the Common Stock reported on the New York Stock Exchange -
Composite (or other principal trading market for the Common Stock in the future)
for the five trading days immediately preceding the 15th day of the month. If
there is no reported price available for the Common Stock for the five trading
days preceding the applicable purchase date, then the Company's management shall
make the determination of the purchase price on the basis of such information as
it considers best reflects current market value.

     The price per share of Common Stock purchased on the open market for
allocation to the accounts of the Plan participants as of an investment date
will be the weighted average price paid by First Union for all open market
shares that were purchased by First Union for that investment date.

14.  VOLUNTARY CASH PAYMENT OPTION

     In the months that the Company makes dividend payments, voluntary cash
payments received from a participant by First Union by the 10th day of the month
will be combined with and invested on the dividend payment date with any
dividend payment to be reinvested. Voluntary cash contributions received by the
10th day of other months will be invested on the 15th day of that month or, if
the 15th is not a trading day, on the first trading day thereafter in that
month. First Union will return voluntary cash payments to a participant upon
telephone, Internet or written request from a participant at least two business
days prior to the investment date.

     If a stockholder wishes to participate only through the investment of
voluntary cash payments, the stockholder must check the "Voluntary Cash Payments
Only (No Dividend Reinvestment)" box on the enrollment authorization form.

     Interest will not be paid by the Company or First Union on any voluntary
cash payments held pending investment under the Plan. Therefore, it is suggested
that any voluntary cash payment you wish to make be sent so as to reach First
Union as close as possible prior to the 10th day of the month. A participant
should be aware of possible delays in the mail if payment is to be made in that
manner.

                                       8

<PAGE>


15.  MANNER OF PAYING FOR VOLUNTARY CASH PAYMENTS

     The option to make cash payments by check or money order is available to
participants each month. Voluntary cash payments by a participant cannot be less
than $50 per month or more than a total of $3,000 in a month. If First Union
receives payments totaling less than $50 in a month or more than $3,000 in a
month from a participant, the amount received of less than $50 or the amount by
which the payments exceed $3,000, as applicable, will be returned to the
participant.

     A voluntary cash payment may be made by a participant when enrolling by
enclosing a check or money order in United States dollars (made payable to
"First Union National Bank - PennEngineering") with the enrollment authorization
form. Thereafter, voluntary cash payments may be made through the use of cash
payment forms attached to each participant's statement of account. The same
amount of money need not be sent each month, and a participant has no obligation
to make a voluntary cash payment each month.

16.  TRANSFERS OF PLAN SHARES BY A PARTICIPANT

     If a participant wishes to change the ownership of all or part of the
participant's Plan shares through gift, private sale, or otherwise, the
participant may do so by delivering a written request to First Union. The
transfer will be effected as soon as practicable following First Union's receipt
of the required documentation, subject to receipt of the written request on or
before the record date relating to a cash dividend payment. No fractional shares
of Common Stock credited to a participant's account may be transferred unless
the participant's entire account is transferred. Requests for account transfers
are subject to the same requirements as for the transfer of securities,
including the requirement of receipt by First Union of a properly executed stock
assignment with a medallion signature guarantee.

     Shares transferred will continue to be held by First Union as agent under
the Plan. An account will be opened in the name of the transferee, if the
transferee is not already a participant, and such transferee will automatically
be enrolled in the Plan. All dividends on shares transferred to the transferee's
Plan account will also be reinvested.

     A transferee will be sent a statement showing the transfer of such shares
into the transferee's account.

17.  SAFEKEEPING DEPOSIT OF COMMON STOCK CERTIFICATES

     At the time of enrollment in the Plan, or at any later time, participants
may use the Plan's "Share Safekeeping Service" to deposit with First Union any
Common Stock certificates in their possession. Shares deposited will be
transferred into the name of First Union or its nominee and credited to the
participant's account under the Plan. Thereafter, such shares will be treated in
the same manner as shares purchased through the Plan. By using the Plan's Share
Safekeeping Service, participants no longer bear the risk associated with loss,
theft, or destruction of stock certificates. Also, because shares deposited with
First Union are treated in the same manner as shares purchased through the Plan,
they may be transferred or sold through the Plan in a convenient and efficient
manner.

18.  SELLING SHARES THROUGH THE PLAN

     Participants may sell shares of Common Stock held through the Plan in most
cases by mailing their sale request using one of the transaction forms provided
with each statement. Certificate shares of Common Stock held outside the Plan
can be deposited in a participant's Plan account and subsequently sold through
the Plan.

                                       9

<PAGE>


     First Union National Bank will process participants' orders no less
frequently than once a week. The proceeds of the sale, less applicable service
fees, brokerage commissions, and other costs of sale, will be sent to the
participant. Any shares to be sold will be sold through a brokerage firm to be
selected by First Union and could include a brokerage firm that is an affiliate
of First Union.

     Participants have full control of their Plan shares and may transfer or
dispose of them at any time. Participants may choose to sell shares held for
them by First Union through the broker of the participant's choice by
instructing First Union in writing. A certificate will be issued and mailed to
the participant or the participant's broker, if so requested, within two
business days of First Union's receipt of the request.

19.  REPORTS TO PARTICIPANTS IN THE PLAN

     Each participant will receive a quarterly statement showing any
dividends reinvested as well as all transactions for the participant's account
during the current calendar year. Statements will also be provided whenever the
participant has deposited or transferred shares of Common Stock or has made
voluntary cash purchases of shares of Common Stock. Participants should retain
these statements in order to establish the cost basis, for tax purposes, of
shares of Common Stock acquired under the Plan. First Union may charge a
participant for a transcript of the history of such participant's account.

     Participants will receive copies of all communications sent to holders of
Common Stock, including quarterly reports, annual reports, proxy material,
consent solicitation material, and Internal Revenue Service information, if
appropriate, for reporting dividend income. All notices, statements, and other
communications from First Union to participants will be addressed to the latest
address of record. Therefore, it is important that participants promptly notify
First Union in writing of any change of address.

20.  DIVIDENDS ON SHARES HELD IN A PARTICIPANT'S ACCOUNT UNDER THE PLAN

     The Company pays dividends, as declared, to the record holders of shares of
its Common Stock and Class A Common Stock. As the record holder and as agent for
the participants, First Union receives dividends for all shares of Common Stock
held in the Plan on the record date. First Union credits such dividends to
participants on the basis of full and fractional shares held in their accounts
and reinvests such dividends in shares of Common Stock.

21.  ISSUANCE OF CERTIFICATES FOR SHARES UPON REQUEST OF A PARTICIPANT

     Unless a participant requests, certificates for Common Stock purchased
under the Plan will not be distributed to the participant. The number of shares
credited to a participant's account under the Plan will be shown on the
participant's statement of account. However, except as indicated below, a
participant may receive certificates for full shares accumulated in the
participant's account under the Plan at any time either by writing or calling
First Union or instructing First Union via the Internet. If certificates for
fewer than all of the shares held in a participant's account are issued, any
remaining full shares and fractional shares will be reflected in the
participant's account and the participant will remain enrolled in the Plan
unless and until the participant terminates his or her participation.

     A participant's rights under the Plan and shares held in the account of a
participant under the Plan may not be pledged. A participant who wishes to
pledge the participant's shares must request that certificates for such shares
be issued in the participant's name and delivered to the participant.

     Certificates for fractional shares will not be issued under any
circumstances. See Item 23.


                                       10

<PAGE>


     Accounts in the Plan will be maintained in the names in which the
certificates of stockholders were registered at the time the stockholders became
participants in the Plan. Likewise, certificates for full shares of Common Stock
will be registered in the same name when issued.

     Upon written request, certificates will be registered and issued in names
other than the account name, subject to compliance with any applicable laws and
the payment by the participant of any applicable taxes, provided that the
request meets the usual requirements of First Union for the recognition of a
transfer of Common Stock of the Company.

22.  WITHDRAWAL FROM THE PLAN

     A participant may withdraw all or a portion of the shares of Common Stock
credited to or held in his or her account either by writing to or calling First
Union or instructing First Union via the Internet to that effect. When a
participant withdraws from the Plan, the participant will receive certificates
for the total number of whole shares of Common Stock held in such participant's
account under the Plan and a check for any fraction of a share of Common Stock
valued at the then current market price of the Common Stock less any brokerage
commission, any service fee, and any other costs of sale. However, whether or
not a participant has requested termination, the participant may instruct First
Union in writing to sell all or a portion of the shares of Common Stock in the
participant's account and deliver the proceeds, less any applicable brokerage
commissions, a service fee, and any other costs of sale, to the participant. See
Item 18.

23.  SALE OF FRACTIONAL INTEREST UPON WITHDRAWAL FROM THE PLAN

     Any fractional interest in a share of Common Stock withdrawn will be sold
by First Union at the then current market price less any brokerage commission,
any service fee, and any other costs of sale. In no case will certificates
representing a fractional interest be issued.

24.  TERMINATION OF PARTICIPATION

     A participant may terminate his or her participation in the Plan at any
time by notifying First Union in writing to that effect. Such instructions will
be processed as promptly as possible after receipt. If a notice to terminate is
received by First Union on or after the record date for a dividend payment,
First Union, in its sole discretion, may either pay such dividend in cash or
reinvest it in shares of Common Stock on behalf of the terminating participant.
If such dividend is reinvested, First Union may sell the shares of Common Stock
purchased and remit the proceeds to the participant, less any brokerage
commission, any service fee, and any other costs of sale.

25.  FEDERAL INCOME TAX CONSEQUENCES

     A participant who reinvests dividends under the Plan will be treated for
federal income tax purposes as having received a taxable dividend in an amount
equal to the cash dividend reinvested in shares of Common Stock under the Plan,
even though that amount is not actually received in cash but instead is applied
to the purchase of shares for the participant's account. In addition, rulings
issued by the Internal Revenue Service indicate that a participant's share of
brokerage commissions for purchases of open market shares, which will be paid by
the Company, will be taxable as dividend income to the participant. A
participant's adjusted basis in the shares of Common Stock acquired under the
Plan will be equal to the amount required to be treated as a dividend, including
any brokerage commissions allocated to such purchases.


                                       11

<PAGE>


     Common Stock purchased with voluntary cash payments will be treated in the
same manner as Common Stock purchased outside of the Plan. A participant's
adjusted basis in such shares will be equal to the price paid, increased by any
brokerage commission, which will be paid by the Company, allocated to such
purchases and treated as dividend income.

     A participant will not realize any taxable income when he or she receives
certificates for whole shares credited to the participant's account upon a
request for such certificates. However, if the participant receives, upon
request, a cash payment as a result of the sale of whole or fractional shares
credited to the participant's account, the participant will realize gain or loss
measured by the difference between the amount of the cash received and the
participant's basis in such shares or fractional shares. Such gain or loss will
be capital in character if such shares or fractional shares are a capital asset
in the participant's hands. For further information as to the tax consequences
of participation in the Plan, a participant should consult with his or her own
tax advisors.

     The tax consequences under state and local tax laws and, for participants
who do not reside in the United States, under foreign tax laws will vary from
jurisdiction to jurisdiction. Each participant is advised to consult his or her
own tax advisor to determine the tax consequences of a particular transaction in
his or her account.

     THE TAX INFORMATION IN THIS ITEM 25 IS PROVIDED SOLELY AS A GUIDE TO YOU
AND MAY BE SUBJECT TO CHANGE BY FUTURE LEGISLATION. YOU ARE ADVISED TO CONSULT
YOUR OWN TAX ADVISORS AS TO THE FEDERAL, STATE, AND FOREIGN INCOME TAX EFFECTS
OF PARTICIPATION IN THE PLAN.

26.  EFFECT OF A PARTICIPANT'S SALE OR TRANSFER OF ALL SHARES OF THE COMPANY'S
     COMMON STOCK AND CLASS A COMMON STOCK REGISTERED IN THE PARTICIPANT'S NAME

     If a participant disposes of all of the shares of Common Stock and Class A
Common Stock registered in his or her name, First Union will continue to
reinvest the dividends paid on the shares of Common Stock held in the
participant's account in the Plan until First Union is otherwise notified.

27.  STOCK DIVIDENDS AND STOCK SPLITS

     Any shares of Common Stock issued as a stock dividend or pursuant to a
stock split with respect to shares of Common Stock held in a participant's
account will be credited to the participant's account. Stock dividends or split
shares distributed on shares registered in a participant's name will be mailed
directly to the participant.

28.  VOTING OF SHARES HELD IN A PARTICIPANT'S ACCOUNT

     If a participant has shares held in an account under the Plan on a record
date for a meeting of stockholders, the participant will be sent proxy material
with respect to that meeting. Under the Company's Restated Certificate of
Incorporation, holders of Common Stock generally do not have a right to vote on
any matter submitted to the Company's stockholders for a vote. In the event
holders of Common Stock are entitled to vote on a matter at a stockholders
meeting, any whole shares, but not fractional shares, of Common Stock that are
held in such participant's account under the Plan on the record date for a
meeting may be voted in person at such meeting or by submitting a proxy to
direct one or more individuals to vote on the participant's behalf. In such
event, participants under the Plan who are registered holders will receive only
one proxy, which will include any shares credited to such participant's account,
and shares for which no proxy is received will not be voted.


                                       12

<PAGE>


29.  SUSPENSION, MODIFICATION, AND TERMINATION OF THE PLAN BY THE COMPANY

     The Company may suspend, modify, or terminate the Plan at any time, in
whole, in part, or in respect of participants in one or more jurisdictions,
without the approval of participants. Notice of such suspension, modification,
or termination will be sent to all affected participants, who will in all events
have the right to withdraw from participation. Upon any termination of the Plan,
each affected participant will receive certificates for all of the whole shares
of Common Stock credited to the participant's account and a check for the cash
value of any fractional shares of Common Stock credited to the participant's
account. Such fractional shares will be valued at the then current market value,
less any brokerage commissions, any service fee, and any other costs of sale.

     In the event the Company terminates the Plan for the purpose of
establishing another dividend reinvestment plan, participants will be
automatically enrolled in such other plan and shares credited to the
participants' Plan accounts will be credited automatically to such other plan,
unless First Union receives notice in writing to the contrary from the
participant.

     The Company also reserves the right to terminate any participant's
participation in the Plan at any time for any reason upon written notice to the
participant at the address appearing on First Union's records.

30.  INTERPRETATION OF THE PLAN

     Any question of interpretation arising under the Plan will be determined by
the Company, and any such determination will be final.

31.  PARTICIPANT BEARS RISK OF MARKET FLUCTUATIONS IN THE COMMON STOCK WITH
     RESPECT TO ALL SHARES HELD BY THE PARTICIPANT UNDER THE PLAN

     A participant's investment in Common Stock under the Plan will be no
different from an investment in Common Stock held directly. The participant will
bear the risk of loss and realize the benefits of any gain from market price
changes with respect to all shares held by him or her under the Plan.

32.  LIABILITY OF THE COMPANY AND FIRST UNION IN CONNECTION WITH THE PLAN

     Neither the Company nor First Union, as Plan administrator, will be liable
for any act done in good faith or for any good faith omission to act in
connection with the Plan, including, without limitation, any claim of liability
arising out of failure to terminate a participant's account upon such
participant's death prior to receipt of notice in writing of such death, or with
respect to the prices at which shares of Common Stock are purchased or shares of
Common Stock are sold from the participant's account, and the times when such
purchases and sales are made, or with respect to any loss or fluctuation in the
market value after the purchase or sale of such shares.

     Participants should recognize that neither the Company nor First Union can
assure participants of a profit or protect them against a loss on the shares of
Common Stock purchased by them under the Plan.


                                 USE OF PROCEEDS

     The proceeds to the Company from sales of Common Stock purchased directly
from the Company pursuant to the Plan will be used for general corporate
purposes, including investment in and advances to the Company's subsidiaries.

                                       13


<PAGE>


                                     EXPERTS

     The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
December 31, 2000 have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon incorporated by reference therein and
incorporated in this Prospectus by reference. Such consolidated financial
statements are incorporated in this Prospectus by reference in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.


                                  LEGAL OPINION

     The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Duane Morris, Philadelphia, Pennsylvania.
Thomas M. Hyndman, Jr., a director of the Company and a retired partner of Duane
Morris, owns 4,220 shares of Common Stock, 1,040 shares of Class A Common Stock,
and currently exercisable options to purchase 3,750 shares of Common Stock. Mr.
Hyndman is also the co-trustee of trusts that hold an aggregate of 1,308,920
shares of Common Stock and 593,608 shares of Class A Common Stock. Another
partner of Duane Morris is a trustee of two trusts that hold an aggregate of
175,000 shares of Common Stock and 110,000 shares of Class A Common Stock.


                              AVAILABLE INFORMATION

     The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports, proxy
statements, and other information with the Commission. Such reports, proxy
statements, and other information can be inspected and copied at the Public
Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. In addition, the
Commission maintains a Web site that contains such materials at
http://www.sec.gov.

     The Company has filed with the Commission in Washington, D.C. a
registration statement on Form S-3 under the Securities Act with respect to the
securities covered by this Prospectus. As permitted by the rules and regulations
of the Commission, this Prospectus does not contain all of the information set
forth in the registration statement. For further information with respect to the
Company and the securities offered hereby, reference is made to the registration
statement, including the exhibits filed or incorporated as a part of the
registration statement. Statements contained herein concerning the provisions of
documents filed with, or incorporated by reference in, the registration
statement as exhibits are necessarily summaries of such documents and each such
statement is qualified in its entirety by reference to the copy of the
applicable documents filed with the Commission. Copies of the registration
statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the Commission described
above.


                                       14


<PAGE>

     NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. NEITHER DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFERING IN SUCH JURISDICTION.


                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
Incorporation of Certain Documents
   by Reference .........................................................     2
The Company..............................................................     3
The Plan.................................................................     3
Description of the Plan..................................................     4
Use of Proceeds..........................................................    13
Experts..................................................................    14
Legal Opinion............................................................    14
Available Information....................................................    14



                                1,000,000 SHARES



                                PENN ENGINEERING

                             DIVIDEND REINVESTMENT
                            AND STOCK PURCHASE PLAN



                                  COMMON STOCK



                                    --------
                                   PROSPECTUS
                                    --------

                                NOVEMBER 15, 2001

<PAGE>


                                     PART II

                   INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The expenses relating to the registration of the shares of Common Stock
being offered hereby will be borne by the Company. Such expenses are estimated
as follows:

Item                                                                  Amount
----                                                                  ------

Registration Fee..................................................   $ 4,388
                                                                      ------
*Legal Fees and Expenses..........................................    20,000
 *Accounting Fees and Expenses....................................     5,000
*Printing and Duplicating.........................................    10,000
*Miscellaneous Expenses...........................................     1,000
                                                                      ------
                  Total...........................................   $40,388
                                                                     =======

*Estimated

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee, or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit, or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The termination
of any action, suit, or proceeding by judgment, order, settlement, conviction,
or upon plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.

     In the case of an action or suit by or in the right of the corporation to
procure a judgment in its favor, Section 145 empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by reason of the fact that such
person is or was acting in any of the capacities set forth above against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that
indemnification is not permitted in respect of any claim, issue, or matter as to
which such person is adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court deems proper.


                                      II-1
<PAGE>


     Section 145 further provides that a Delaware corporation is required to
indemnify a director, officer, employee, or agent against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with any action, suit, or proceeding or in defense of any claim, issue, or
matter therein as to which such person has been successful on the merits or
otherwise; that indemnification provided for by Section 145 shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
that indemnification provided for by Section 145 shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee, or agent and shall inure to the benefit of
such person's heirs, executors, and administrators and empowers the corporation
to purchase and maintain insurance on behalf of a director or officer against
any liability asserted against such person and incurred by such person in any
such capacity or arising out of such person's status as such whether or not the
corporation would have the power to indemnify such person against such liability
under Section 145. A Delaware corporation may provide indemnification only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because
such person has met the applicable standard of conduct. Such determination is to
be made (i) by the board of directors by a majority vote of a quorum consisting
of directors who were not party to such action, suit, or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders.

     Article VIII of the Company's By-laws provides for indemnification of
directors and officers of the Company to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as presently or hereafter in
effect.

     The Company provides liability insurance for directors and officers for
certain losses arising from claims or charges made against them while acting in
their capacities as directors or officers of the Company up to an aggregate of
$25,000,000 inclusive of defense costs, expenses, and charges.

     In addition, as permitted by the General Corporation Law of the State of
Delaware, Article X of the Company's Restated Certificate of Incorporation
provides that no director of the Company shall incur personal liability to the
Company or its stockholders for monetary damages for breach of such person's
fiduciary duty as a director; provided, however, that the provision does not
eliminate or limit the liability of a director for (i) any breach of the
director's duty of loyalty to the Company or its stockholders; (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) the unlawful payment of dividends or unlawful purchase
or redemption of stock under Section 174 of the General Corporation Law of the
State of Delaware; or (iv) any transaction from which the director derived an
improper personal benefit.

ITEM 16. EXHIBITS.

     The Exhibits filed herewith are set forth on the Index to Exhibits filed as
a part of this Registration Statement.

                                      II-2

<PAGE>


ITEM 17. UNDERTAKINGS.

     The undersigned registrant hereby undertakes:

     (a)  To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

          (i) To include any prospectus required by Section 10(a)(3) of the
     Securities Act of 1933;

          (ii) To reflect in the prospectus any facts or events arising after
     the effective date of the Registration Statement (or the most recent
     post-effective amendment thereof) which, individually or in the aggregate,
     represent a fundamental change in the information set forth in the
     Registration Statement. Notwithstanding the foregoing, any increase or
     decrease in volume of securities offered (if the total dollar value of
     securities offered would not exceed that which was registered) and any
     deviation from the low or high end of the estimated maximum offering range
     may be reflected in the form of prospectus filed with the Commission
     pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
     price represent no more than a 20% change in the maximum aggregate offering
     price set forth in the "Calculation of Registration Fee" table in the
     effective registration statement; and

          (iii) To include any material information with respect to the plan of
     distribution not previously disclosed in the Registration Statement or any
     material change to such information in the Registration Statement;
     provided, however, that paragraphs (a)(i) and (a)(ii) of this Item 17 do
     not apply if the Registration Statement is on Form S-3, Form S-8, or Form
     F-3, and the information required to be included in a post-effective
     amendment by those paragraphs is contained in periodic reports filed with
     or furnished to the Commission by the registrant pursuant to Section 13 or
     Section 15(d) of the Exchange Act that are incorporated by reference in the
     Registration Statement.

     (b) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and

     (c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

     The undersigned registrant hereby further undertakes that, for purposes of
determining any liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

                                      II-3

<PAGE>


     The undersigned registrant hereby further undertakes that, insofar as
indemnification for liabilities arising under the Act may be permitted to
directors, officers, and controlling persons of the registrant, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense of
any action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

                                      II-4

<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Danboro, Pennsylvania on November 15, 2001.

                               PENN ENGINEERING &
                               MANUFACTURING CORP.


                               By:/s/ Kenneth A. Swanstrom
                                  ---------------------------------------------
                                  Kenneth A. Swanstrom, Chairman
                                  of the Board and Chief Executive Officer

     Know all men by these presents, that each person whose signature appears
below constitutes and appoints Kenneth A. Swanstrom and Mark W. Simon, and each
or either of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution, for such person, and in such person's
name, place, and stead, in any and all capacities to sign any or all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them or their substitutes, may lawfully do or cause to be done
by virtue hereof.

     Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.

<TABLE>
<CAPTION>


        Signature                                    Title                          Date
----------------------------         -----------------------------------      -----------------


<S>                                  <C>                                      <C>
/s/ Kenneth A. Swanstrom             Chairman of the Board and                November 15, 2001
----------------------------         Chief Executive Officer
Kenneth A. Swanstrom                 (principal executive officer)


/s/ Martin Bidart                    President, Chief Operating               November 15, 2001
----------------------------         Officer and Director
Martin  Bidart                       (principal operating officer)


/s/ Mark W. Simon                    Vice President - Finance, Corporate      November 15, 2001
----------------------------         Secretary and Director (principal
Mark W. Simon                        financial and accounting officer)


/s/ Willard S. Boothby, Jr.          Director                                 November 15, 2001
----------------------------
Willard S. Boothby, Jr.


/s/ Lewis W. Hull                    Director                                 November 15, 2001
----------------------------
Lewis W. Hull


/s/ Thomas M. Hyndman, Jr.           Director                                 November 15, 2001
----------------------------
Thomas M. Hyndman, Jr.


/s/ Maurice D. Oaks                  Director                                 November 15, 2001
----------------------------
Maurice D. Oaks


/s/ Charles R. Smith                 Director                                 November 15, 2001
----------------------------
Charles R. Smith


/s/ Daryl L. Swanstrom               Director                                 November 15, 2001
----------------------------
Daryl L. Swanstrom

</TABLE>

                                      II-5


<PAGE>

<TABLE>
<CAPTION>

                                  EXHIBIT INDEX
                    (Pursuant to Item 601 of Regulation S-K)

Exhibit
Number                                Exhibits                                       Reference
-------    -------------------------------------------------------------------    ----------------

<S>        <C>                                                                    <C>
4.1        Specimen Stock Certificate for Registrant's Class A Common Stock              *
           (voting) (Incorporated by reference to Registrant's Form 8-A
           Registration Statement filed with the Commission on May 15, 1996.)

4.2        Specimen Stock Certificate for Registrant's Common Stock                      *
           (non-voting) (Incorporated by reference to Registrant's Form 8-A
           Registration Statement filed with the Commission on May 15, 1996.)

4.3        Restated Certificate of Incorporation of Registrant, as amended               *
           (Incorporated by reference to Exhibit 3.1 of Registrant's Form 10-Q
           Quarterly Report for the quarter ended March 31, 2001.)

4.4        By-laws of Registrant, as amended (Incorporated by reference to               *
           Exhibit 3.2 of Registrant's Form 10-Q Quarterly Report for the
           quarter ended June 30, 2000.)

5          Opinion of Duane, Morris & Heckscher LLP                               Filed herewith

23.1       Consent of Ernst & Young LLP                                           Filed herewith

23.2       Consent of Duane, Morris & Heckscher LLP
           (Included in its opinion filed as Exhibit 5)

24         Power of Attorney                                                      Set forth in the
           (see page II-5 of this Registration Statement)                         signature pages
                                                                                  hereto

99         PennEngineering Enrollment Authorization Form                          Filed herewith

</TABLE>

-----------

*    Such Exhibit is hereby incorporated by reference as indicated.


                                      II-7

<PAGE>