The 24th-ranked Nittany Lions were picked apart by Cougars star Case Keenum, who threw for 532 yards and three touchdowns. Penn State was allowing 162 yards passing per game, but Keenum threw for more than double that by halftime.
"I thought the guys came out and they played hard. It's been a difficult year for them," Penn State interim coach Tom Bradley said. "It just didn't go our way."
Keenum burned the Nittany Lions' veteran secondary with touchdown passes of 40 and 75 yards to build a 24-7 lead by halftime.
It was the school's first bowl game without Paterno as head coach since the 1962 Gator Bowl, a 17-7 loss to Florida.
The Hall of Famer was fired Nov. 9 in the aftermath of the shocking charges against retired assistant coach Jerry Sandusky. Longtime defensive coordinator Bradley took over on an interim basis, tasked with guiding a team besieged by media scrutiny.
"These kids have been through hell and back," said assistant coach Jay Paterno, Joe's son.
Bypassed by more prominent bowls, some Nittany Lions debated whether to travel to Dallas at all, then vowed they were over getting jilted and focused on stopping Houston.
Turned out Linbacker U. got trampled over by Keenum and Houston's high-octane offense.
Receiver Patrick Edwards burned safety Macolm Willis for a 40-yard touchdown pass from Keenum down the left sideline for a 7-0 lead just 1:52 into the game that often resembled a one-sided track meet. Keenum hit Justin Johnson for an 8-yard TD pass with 2:35 left for a 17-0 lead.
Already the NCAA career leader coming into the game for passing yardage and touchdown passes, Keenum added another record to his impressive resume. His 227 first-quarter passing yards set the record for most passing yards in one quarter in any bowl game, breaking the mark previously held by Louisville's Browning Nagle (223 yards) against Alabama in the first quarter of the 1991 Fiesta Bowl, according to TicketCity Bowl officials.
Penn State All-American defensive tackle Devon Still, already slowed by turf toe, couldn't keep up with Keenum's quick release and Houston's no-huddle attack. The Cougars exploited Penn State's bend-but-don't -break defense across the middle, including Edwards 75-yard touchdown reception up the seam from a scrambling Keenum for a 24-7 lead by halftime.
Keenum finished 45 of 69 passing - two fewer attempts than the number of offensive plays Penn State ran all afternoon.
Down by 20 midway through the third quarter, cornerback Stephon Morris tried to keep his fellow defenders motivated on the bench with high-fives. The struggling offense without injured starting quarterback Matt McGloin provided a glimmer of hope after backup Rob Bolden connected with Justin Brown for a pretty 69-yard touchdown pass to cut the lead to 27-14 at 2:38 of the third quarter.
Penn State's defense adjusted to hold the Cougars to just two field goals in the second half, but the early deficit proved too much to overcome, and Bolden threw three second-half interceptions - two by safety Nick Saenz.
With 12 minutes left in the fourth quarter, Penn State had already given up 552 yards of total offense to Houston, the most allowed by the Nittany Lions all season.
This wasn't the lasting impression Bradley wanted to leave on the Penn State committee searching for Paterno's replacement. The outgoing Bradley, who is popular with players, is among the candidates who have been interviewed. Acting athletic director David Joyner has said he hopes to have a new coach in place to give him a few weeks to recruit before Feb. 1, when high school seniors can announce their college choices.
Bolden finished 7 of 26 passing for 137 yards, while Stephfon Green ran 63 yards on 15 carries including a 6-yard scoring run on a direct snap in the second quarter.
It was one of the few times the Cougars' D was tricked. After getting upset 49-28 by Southern Mississippi in the Conference USA title game, and lose a chance to play in the BCS, Houston ended the season with an impressive win over a power conference team.
Edwards finished with 10 catches and 228 yards for two touchdowns, while Johnson had 12 catches for 148 yards at the 92,000-seat Cotton Bowl. The stands were about a half-full on a sunny afternoon that ended with Houston's red-clad fans celebrating in the stands and chanting "Houston."