The story begins in Florence, Italy when Giovanni Panerai (1825-1897) a respected craftsman in his day, opened a small watch shop on the Ponte alle Grazie. Early on, Giovanni Panerai earned a reputation as a very skilled watch maker. Leon Francesco Panerai, Giovanni Panerai's son, took over the small workshop upon the death of his father and continued on the same path, to build the most precise and beautiful watches of his day.

At the same time that Leon Francesco Panerai took over the watch shop from his father, his son founded Guido Panerai and Figliothe to design and manufacture high-precision mechanical instruments. The company soon became the official supplier to the Royal Italian Navy (Regia Marina Militare Italiana). This unique partnership between the Royal Italian Navy (Regia Marina Militare Italiana) and Guido Panerai and Figliothe soon became the cornerstone of the company's success.

The company was eventually renamed: Officine Panerai. Many of the Panerai watch designs of Officine Panerai today are influenced and inspired by this unique history and partnership. Panerai watches are still made to the exacting standards of earlier times.

In 1934, continuing in the Panerai tradition, Giuseppe and Maria took over after the death of their father Guido Panerai. Giuseppe oversaw the military equipment division, while his sister, Maria Panerai, dedicated her life to the Panerai watch shop.  Panerai watches, despite their durability and precision, were not sold to the general public. In fact, much of the technology developed was a guarded secret of the Italian Navy. These watches were only produced in small quantities and only made to order, typically only 30 at a time. 

It was only 15 years ago, in 1992, that Panerai produced a limited re-edition of their Mare Nostrum and their Luminor (originally designed and produced as prototypes for the Italian Navy during World War II, but never produced due to the war ending). These two watches were so well received by the general public that they sold out almost immediately. This immediate success convinced Officine Panerai to enter the luxury watch market.