Both teams come in with 11-2 records.
RELATED: College Football Playoff bracket predictions and bowl picks
The Mustangs made a splash in their first season in the ACC, going undefeated in conference play before falling to Clemson in the league championship.
Penn State is finally in the CFP. The Nittany Lions finished in the top 12 in the final CFP rankings six times when the field was limited to just four teams.
Penn State's dynamic duo of junior running backs Kaytron Allen and Nicholas Singleton goes against SMU's stout rushing defense.
The Mustangs lead the ACC and are fourth nationally giving up 93.4 yards rushing per game - which for now is the lowest in program history. They allow only 2.74 yards per carry. Singleton is ninth in the Big Ten with 839 yards rushing, just ahead of Allen's 822.
READ MORE: Penn State QB Drew Allar to return for senior year
Both had 100-yard games against No. 1 Oregon in the Big Ten championship game. The only individual 100-yard rushing game against the Mustangs was Louisville's Isaac Brown, who went for 117 yards on Oct. 5.
The winner faces Boise State in the quarterfinals at the Fiesta Bowl on New Year's Eve.
The Associated Press and ESPN contributed to this report.