Public Enemy Number 1's (PENI) original membership consisted largely of white, middle-class youths active in the punk music subculture popular in southern California in the mid-1980s.  In fact, the name of the group comes from the 1980's British punk band Rudimentary Peni (there is no other connection between the band and the gang).

Music venues offered a variety of alternative music that appealed to both racist and non-racist skinheads, and some featured explicitly white power bands.  People came from a wide geographic area, including Long Beach and the Inland Empire, to hear the music, drink, meet, network and form groups.  A number of white street gangs emerged from this scene, including, among others, PENI, Los Angeles Death Squad, Norwalk Skins and Orange County (OC) Skins.

PENI began as a white power gang, but without a single clear purpose or orientation.  Almost from the outset, PENI was divided into two camps--one faction emphasized maintaining an ideologically oriented white power organization while the other faction championed carrying out more criminal activities.  Brody Davis, an influential member of PENI's original cadre, allegedly encouraged members to follow a more traditional path of promoting white power and racist skinhead ideology and to reject drug use and criminal activity.  Initially, the group followed this path and members distributed leaflets that promoted white supremacy while also engaging in typical skinhead activities like heavy drinking and fighting.

However, another PENI leader, Donald Reed "Popeye" Mazza, reportedly used his own influence to steer the group in a different direction and as Davis's leadership position waned, many of the disenfranchised white youths in PENI turned to drugs.  By the late 1980s, PENI's activities resembled those of other criminally active gangs.  The drug habits of Mazza and other PENI members drove a shift towards drug trafficking and crime to support the habits.  To this day, drug use remains prevalent among PENI members.

PENI's membership gradually increased as it expanded geographically from Long Beach to Orange County and expanded its criminal enterprises from drug distribution to also include auto theft, burglary, property crime, witness intimidation and identity theft.    This in turn led to an increased PENI presence in California's prison system.  Prison-based PENI members used the prisons as sources of recruitment, and PENI began to grow behind bars.