Board Thread:Club Penguin/@comment-99.98.137.99-20130325045402/@comment-4500149-20130603032210

Nope, four letters are the minimum you can use when you create a penguin. :) Although, I believe there some betas with 3-letter usernames, such as ALI. However, Club Penguin changed ALI's username to "P" followed the penguin ID last time I checked.