This literary journal was established in 1940 by Max Harris in Adelaide. Within two years it was financed by John and Sunday Reed and jointly edited by Harris, the Reeds and Sidney Nolan in Melbourne. Angry Penguins encouraged modernism in Australian literature and culture, in opposition to the literary nationalism of Meanjin. Angry Penguins rose to fame in 1944 when it became the subject of a celebrated literary hoax. While working at the Victoria Barracks in Melbourne, James McAuley and Harold Stewart, both accomplished poets, challenged the pretensions of the modernist poetry published in Angry Penguins.
They submitted a selection of poems they had written as the poetry of 'Ern Malley', a poor, recently deceased and unknown poet from Melbourne. Designed as a 'serious literary experiment', the poetry satirised the modernism Harris so enthusiastically embraced. Harris, the Reeds, Nolan and others endorsed the value of the poems and the Autumn (June) 1944 edition of the journal was dedicated to Ern Malley. When the hoax was discovered a literary uproar resulted. Poetry hit the front pages of Australian newspapers. Max Harris' authority was undermined and the reputations of all associated with the magazine severely damaged. Angry Penguins lost its focus and published only three more editions, though the merits or otherwise of Ern Malley's verse are still debated.