Panucci began his playing career with Italian club Genoa in 1990, and moved to Milan in 1993, where he won several titles, including two Serie A titles and the UEFA Champions League in 1994, appearing in the final 4–0 victory over Barcelona as a left-back. Although he initially served as a back-up to the starting defensive line-up of Paolo Maldini, Franco Baresi, Alessandro Costacurta, and Mauro Tassotti, which is regarded as one of the greatest defences of all time, his precocious performances enabled him to break into the starting line-up, and earned him the Bravo Award in 1994. In 1996, he followed his former Milan coach Fabio Capello to Real Madrid, and was a starting right-back for the Spanish side, winning a La Liga title in 1997, and his second UEFA Champions League in 1998. He returned to Italy to join Internazionale in 1999, but with less success, and was subsequently sent on loan to Premier League side Chelsea the following season, before joining French side Monaco. He transferred to Roma in 2001, where he was once again reunited with manager Capello, and remained at the club until 2009. His leadership and experience saw him play a key role for the club in his centre-back role, as he won two consecutive Coppa Italia titles in 2007 and 2008, as well as the Supercoppa Italiana. He retired in 2010, after a season with Parma.