The Italian and her fans at the Foro Italico had been hoping for an upset.
Instead, Williams won her 17th consecutive match on clay as the former number one continues to power back into the WTA elite.
Williams needs two more wins on the red Rome clay to notch a third straight WTA title on the surface, after winning Charleston last month and claiming the honours in Madrid last weekend.
Five of the 30-year-old's 41 career titles were won on clay, and she previously triumphed in Rome a decade ago.
Pennetta took a lengthy medical treatment time-out when trailing 3-0 in the first set and looked clearly out of sorts.
After getting her wrist taped, the last Italian woman in the field tried one more game before giving up.
Pennetta, ranked 21st in the world and a clay finalist in February in Acapulco, was playing in her third quarter-final of 2012.
She has now lost 40 matches against top-10 players, while winning 19.
Serena surges into semis as Pennetta retires hurt
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