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In 2006-07, he returned to honour his contract as player-coach with Lyon OU in Pro D2. His last season was to be tough, as he received a suspension for 30 days for insulting a referee during a match against USA Limoges.

He then returned to CA Brive, (then in the second division). He helped them to promotion for the 2003-04 season. In 2005 he signed at Lyon OU as player-coach, despite his age he surprised many by becoming one of the best players in the league. He then signed for Stade Français in 2005 - lasting only one season.

It is with CA Brive that Penaud will be best remembered, captaining the team in winning the European Cup in 1997 against Leicester Tigers and featured in the final the following year against Bath. He was brought by Saracens for the 1998-99 Allied Dunbar Premiership season to replace Michael Lynagh, and scored a try on his debut against Northampton Saints. Despite a three-year contract, he spent only one season across the channel (finishing 3rd in the league), preferring, for family reasons to return to France at Toulouse. Producing two excellent seasons, Penaud was recalled to the France squad for the 2000 Six Nations.

A player more known for his vision of the game more than for his goal-scoring talent, his international career was limited due to his strong personality and the tactical choices of many coaches. He has indeed never been selected for a World Cup - even though his career has covered five World Cups (from 1991 to 2007).

Alain Penaud started with CA Brive in the early 1990s. Alongside Sebastien Viars, he formed a formidable back line. His first start for France came against Wales in 1992. Penaud has been in and out of the side for France, though still appeared in the 1997 Grand Slam win, including a last minute victory against England at Twickenham. After a defeat in Brisbane in the summer of 1997 his name disappeared from selections, missing the 1999 World Cup.

Alain Penaud (born 19 July 1969 in Juillac) is a former rugby union player. He held the position of flyhalf, mainly at CA Brive. He was selected 32 times for the French national team, from 1992 to 2000. He is the Father of another French international, Damian Penaud.