Pencil Bluff is an unincorporated community and census-designated place in Montgomery County, Arkansas, United States. Pencil Bluff is located at the junction of U.S. Route 270 and Arkansas Highway 88, 7.5 miles northwest of Mount Ida. It was first listed as a CDP in the 2020 census with a population of 72. Pencil Bluff has a post office with ZIP code 71965.