The hill of Panicale, that had once belonged to Etruscan Chiusi, to the Romans and to the Longobards,was particularly important to Perugia in the 13th and 14thcenturies, for its strategic position controlling the valleys of the Nestore River and Lake Trasimeno.

The town overlooks the lake from a natural balcony. It developed in a circular pattern around three piazzas, unusually set in a straight line going up the hill.

The lowest is the ancient Piazza del Comune (Piazza Umberto 1), with the Palazzo Pretorio opposite the handsome travertine fountain (1473). Next is the Piazza of the Collegiate Church of San Michael the Archangel. Founded by the Longobards, the church was enlarged in the 17th and 18th centuries and sumptuously decorated in the Baroque style. Noteworthy is the panel painting of the "Adoration og the Shepherds" by Giovan Battista Caporali (1519). At the top of the hill is the piazza with the Gothic Palazzo del Podestà. Outside the Porta Fiorentina are the 13th‑century Church of Sant'Agostino and the elegant Church of the Madonna della Sbarra, in the style of the 16th and 17th centuries.

In 1505, in the Church of Saint Sebastian, Pietro Perugino peinted "The Martyrdom of Saint Sebastian".

The Cesare Caporali Theater. Built in the 18th century and called "Theater of the Sun", it was transformed in 1858 by the architect Giovanni Caproni. The wooden interior is fully decorated with stucco and painted medallions. The central canvas, entitled "Bordrino of Panicale enters Perugia", was painted in 1869 by Mariano Piervittori.

Not far from Tavernelle, in the Panicale area, is the Renaissance church Santuario di Mongiovino. The central plan with dome was designed by Rocco da Vicenza in the early 16th century. Inside are frescoes by Niccolò Circignani called "Pomarancio"and Arrigo Fiammingo. The ancient hamlet of Mongiovino Vecchio sits on a pleasant hill behind the Santuario.