The expanding clinical use of low-energy photon emitting ¹²⁵I and ¹⁰³Pd seeds in recent years has led to renewed interest in their dosimetric properties. Numerous papers pointed out that higher accuracy could be obtained in Monte Carlo simulations by utilizing newer libraries for the low-energy photon cross-sections, such as XCOM and EPDL97. The recently developed PENELOPE 2001 Monte Carlo code is user friendly and incorporates photon cross-section data from the EPDL97. The code has been verified for clinical dosimetry of high-energy electron and photon beams, but has not yet been tested at low energies. In the present work, we have benchmarked the PENELOPE code for 10–150 keV photons. We computed radial dose distributions from 0 to 10 cm in water at photon energies of 10–150 keV using both PENELOPE and MCNP4C with either DLC-146 or DLC-200 cross-section libraries, assuming a point source located at the centre of a 30 cm diameter and 20 cm length cylinder. Throughout the energy range of simulated photons (except for 10 keV), PENELOPE agreed within statistical uncertainties (at worst ±5%) with MCNP/DLC-146 in the entire region of 1–10 cm and with published EGS4 data up to 5 cm. The dose at 1 cm (or dose rate constant) of PENELOPE agreed with MCNP/DLC-146 and EGS4 data within approximately ±2% in the range of 20–150 keV, while MCNP/DLC-200 produced values up to 9% lower in the range of 20–100 keV than PENELOPE or the other codes. However, the differences among the four datasets became negligible above 100 keV.