The club was founded in 1890 in Smyrni (now called Izmir by the Turks), under the name of "Orpheus Music and Sports Club". 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 Gymnastikos Syllogos Smyrnis (P.G.S.S.) .
After the Greek military defeat in 1922, the atrocities by the Ottomans and the disaster of the city of Smyrni, the club was forced to transferred firstly to Athens, together with the thousands of Greek refugees and finally to the Athenian suburb of Nea Smyrni, named like that to honor the memory of the burned city in Asia Minor.
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. 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" PGSS.
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. Panionios GSS is the winner of the Greek CUP of 1979 and 1998 as well as the winner of the Balkan Cup of 1971.
Panionios has produced all three major Greek strikers of the 1980s, namely Nikos Anastopoulos, Thomas Mavros, and Dimitris Saravakos. Other notable players coming out of the club include Giorgos Dedes, George Skrekis, Nikos Tsiantakis and Takis Fyssas,
In 2004, ship-owner Constantinos Tsakiris was elected president of the "amateur club" PGSS. 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, Mr. Tsakiris acquired 85% of Panionios FC stock and started restructuring the team from scratch. He changed the name of the club back to the original "Panionios GSS" FC.
Mr. 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.