The club was founded in 1890 in Smyrna (Σμύρνη) currently İzmir, under the name of "Orpheus Music and Sports Club" by part of the Greek population living in the city during the Ottoman era. In 1893 some Orpheus members keen on sports formed a separate organization, the "Gymnasion Club", and started holding yearly sports competitions. In 1898, Orpheus and Gymnasion merged again to form Panionios GSS. Members of the Panionios sports club represented Greece in all international track & field games until these developed in the modern Olympic Games.
After the Greek military defeat in 1922 the club was forced to transfer firstly in Athens and later to the Athenian suburb of New Smyrna where lots of the population of Smyrna immigrated. The club has a tradition of cultivating all major sports and was the first Greek club to establish a track and field division for women, in 1925. Another major example of the club's contribution to Greek sports rests in the fact that it was Panionios that introduced Basketball and Volleyball in Greek sports society.
With the gradual transformation of men's football and basketball into professional sports, Panionios FC and Panionios BC became privately owned clubs operating under the auspices of the traditional "amateur sports" Panionios GSS. To date, Panionios remains the only sports club in Greece that was awarded the Golden Cross from the Athens Academy as a recognition of the club's rich and continuous enrichment of Greek sports.
Panionios has spent nearly its entire history in the Greek First Division (now called 'Superleague'), having missed out from competing in Greek football's top division only twice in its more than 100-year history. Within this, Panionios rose quite often to high levels, with top achievement in terms of the league being the 2nd position that the club reached in 1971, losing the title to AEK Athens.
The club had faced financial difficulties which triggered the transfer of the ownership to the municipality of Nea Smyrni in 1992. Those difficulties remained all through the 1990s forcing the team's league performance to drop. Yet, it remained in a high level and managed to win the Greek Football Cup competition in 1998 and participate successfully in the UEFA Cup Winners Cup the year after, reaching the quarterfinals. In December 2001 large part of the club's shares moved away from the Municipality back to private hands, where working around bankruptcy legislation the club was renamed to Neos Panionios FC, to avoid the threat of relegation from the first division.
In 2004, shipowner Constantinos Tsakiris was elected president of the "amateur sports" Panionios GSS. Panionios won the women's Basketball Championship in 2006, the club's first in a team sport, and the women's volleyball team advanced to the first division. In 2006, Tsakiris acquired 85% of Neos Panionios FC stock and started restructuring the team from scratch. He changed the name of the club back to the original Panionios GSS FC and hired German coach Ewald Lienen who, during his first year created a team that made it to the top 5 of the Greek Super League and on to the UEFA Cup. Tsakiris has also unveiled an ambitious plan to have the aging football ground and athletics track demolished, and build a modern multi-sport arena in its place. Apart from a 12.000 capacity football stadium, the proposed complex would include facilities for basketball, volleyball, aquatic sports, track & field, boxing, gymnastics, wrestling and more.
On the summer transfer window of 2008, the club signed Uruguay national team members Álvaro Recoba and Fabián Estoyanoff, but shortly after Lienen resigned by mutual consent on November 11, 2008, reason being disagreement with the Panionio's board. On November 12, 2008 Greek coach Takis Lemonis was hired  and resigned on December 3, 2008 after the refuse of Panionio's board to accept Lemoni's request to dismiss three members of Panionio's coaching and management staff. Assistant coach Joti Stamatopoulos lead the club until the end of the season. He was replaced by Belgian manager Emilio Ferrera.
Under the Tsakiris presidency, the club built its own training facility just outside Athens in the region of Koropi. The training ground is operating since 2008 but was fully completed in 2009.
In the summer of 1964 Panionios took part in the Cup Rapanos in place of the Olympic, who retired after having been given two games with Toulouse (2–4) and Dinamo Zagreb (0–4). The results were calculated in the standings without replay Panionios these groups. Panionios has three games: two at home Kaftantzoglio Stadium, which had a lights away with Malmo. The away game against Toulouse, who refused to attend the Olympic, won 3–0 in favor of the French team.