With the score 14-14 in the final four minutes, Newcastle's back-up five-eighth Tyson Gamble nailed a field goal from long range only seconds after Nathan Cleary had sprayed his own attempt under the crossbar.
Lachlan Fitzgibbon hit Cleary late as the Panthers co-captain drilled his second attempt over the black dot but was inexplicably not penalised, the game instead moving into golden point with the scores locked at 15-15 after 80 minutes.
A mere 40 seconds into extra time, Cleary made no mistake on his fourth shot of the night and the Panthers were home despite the spirited Knights scoring three tries to two.
The Knights, tipped for the wooden spoon before the start of the season, beat the reigning premiers at their own game in the first half as they chased a monumental upset.
Despite missing co-captains Jayden Brailey and Kalyn Ponga, Newcastle completed all of their first 10 sets and muscled on their goal line, all the while poking holes in Penrith's usually tight defensive wall.
Penrith bled three tries at close range in the first half - more than they have conceded in any game since before last year's finals series.
Stand-in hooker Phoenix Crossland scored the most memorable with a grubberkick out of dummy-half.
The Panthers' attacking exuberance from the past fortnight was nowhere to be seen.
It took Knights veteran Dane Gagai backchatting the referee and conceding a penalty for the Panthers to march into Knights territory and score for the first time through Brian To'o.
But the ascendancy was to be short-lived.
The Knights had the Panthers rattled, forcing them into errors in good field position.
Errant handling in the red zone cost Penrith four times in the first 10 minutes of the second half as the Panthers finished the match with 13 errors.
The difference in the second half was that Newcastle were mistake-prone as well and put Penrith in position to score again with another avoidable penalty.
A minute after Tyson Frizell pulled Jarome Luai's hair in a tackle, the Panthers were over through interchange forward Jaeman Salmon.
It took extra time for the Panthers to sneak home and deny what would have been a famous victory for the Knights, who can take considerable confidence out of the loss.
Newcastle were outplayed 42-6 in the corresponding fixture last season but are clearly made of sterner stuff this year.
In the minutes before halftime, Penrith came up with perhaps the best captain's challenge since the rule was introduced in 2020.
Referee Peter Gough sin-binned Spencer Leniu for taking Tyson Gamble out as he attempted to chase a kick in the red zone, only for the challenge to reveal Scott Sorensen, not Leniu, had accidentally collided with Gamble in the play.
No penalty was awarded and Leniu remained on the field.
Brodie Jones is expected to join the Knights' casualty ward after being ruled out with a quad injury mid-game.
