Peneda lies in the parish of Gavieira within the municipality of Arcos de Valdevez and is well known because of the Shrine of Our Lady of Peneda. The village lies mainly on the left bank of the Peneda River on the lower levels of the slopes, leaving the valley floor with more fertile soils free for farming. The place has a rare beauty where the green of the fields, the grey of the granite and the remarkable setting of the monumental sanctuary to Senhora da Peneda stand out. In addition to the sanctuary, the locale is also highly sought after because of the imposing waterfall with a height of 30 meters, as well as the Fraga (rock face) of Meadinha, which is very well known among climbers and hikers.