The area was settled by the Etruscans and later became a safe haven for the Roman soldiers who survived the Battle of Trasimene, which was won by the Carthaginian general Hannibal. After the fall of the Roman Empire and after having been under the Longobards, in 1037 Panicale became one of the first Italian towns to declare themselves free and independent from outside domination. In the XIII century it granted control to Perugia, but in 1316 it once again became free and set up its own government. The castle of Panicale was considered one of the most important fortified structures in all of Italy and withstood any attempts at being taken until 1643, when the Florentine army conquered it during the war between the Papal States and the Duchy of Parma. It came under the control of the Church until the country united as the Kingdom of Italy.
Among the most important landmarks, from an artistic point of view, is the Fountain, constructed in the late XV century, the Collegiata di San Michele Arcangelo, a fine example of Umbrian Baroque architecture, the Palazzo del Podestà, which dates to the 1300s and has double lancet windows and a tall tower that can be seem from the valley below, the Cesare Caporali Theatre, one of the smallest in all of Umbria and made entirely of wood, decorated with gilded stucco and painted garlands.
Don't miss a visit to the Tulle Museum in the former Church of Sant'Agostino, not far from Piazza Fiorentina on Piazza Regina Margherita. It is dedicated to Anita Belleschi Grifoni, a local woman who, in the early 1900s, brought back a special type of embroidery on tulle known as Ars Panicalensis.
The Pinacoteca Mariottini is located inside City Hall and houses 31 portraits of illustrious men from the past.
The complex of San Sebastiano is worthy of note. It was built in a lovely garden in the XVII century by the Jesuits next to the Church of San Sebastiano. The church houses two gorgeous frescoes by Il Perugino: the Martyrdom of St Sebastian and the Madonna with Child surrounded by Saints.
Just further on is the Church of the Madonna della Sbarra, built in 1625 outside the walls of the castle in a place where the customs hut was located in ancient times, hence Sbarra, or Barrier.
In the surrounding area you'll find the Sanctuary of the Madonna di Mongiovino, built in pure Renaissance style and home to the work of the best chisellers and inlayers of the era (Lorenzo da Carrara, Giovanni Lombardo, Domenico Fiorentino), and the Sanctuary of the Madonna di Grondici, set in a wood of oak, olive, cypress and pine trees. It was a popular destination for pilgrims because of the miraculous image painted in 1495 by Gregorio Gregari.