Penguins do have knees, but they are covered in feathers, so they are not visible. A penguin's leg has four parts: the short femur, knee, tibia and fibula.
Because their upper leg bones are covered, penguins appear to have very short legs. Their waddling walk also makes it seem they are unable to bend their legs. Actually, some penguins can run quite fast, such as the Gentoo penguin which has been clocked at a top speed of 22 mph. Since penguins spend almost 75 percent of their lifetime in the water; their knees help them swim. Penguins live almost exclusively in the Southern Hemisphere. The Galapagos penguin, which lives near the equator, is the only species that ventures into the Northern Hemisphere.