The name Pennone seems to refer to the evocative image of the flagpole of a ship, as the palace stands at the highest point of Lugnano, in an imposing position over the village. In fact, the name derives from Antonio Pennoni, the first owner or commissioner of the Palace.
It was built approximately in 1650, probably on the site of the ancient townhall, St. Peter’s Church and the Chancellery.  It later became property of the family Vannicelli, whose emblem in wrought-iron is preserved above the well. Until the 18th century it was the residence of the Governor of the Apostolic See, later on it was respectively a barn, mill and silkworm breeding centre, until falling into complete disuse. Recently it has been renovated and today it hosts the Town Hall.