Major, trace element and radiogenic isotope (Sr, Nd, Pb) data are reported for a suite of rocks from the Panarea volcano, a large structure that is largely hidden below sea level and outcrops only as a group of small islands between Lipari–Vulcano and Stromboli in the eastern Aeolian arc. The exposed rocks mostly consist of high-potassium calc-alkaline (HKCA) andesites, dacites and some rhyolites; shoshonitic basalts have been collected from submarine centres; mafic calc-alkaline (CA) rocks occur as thin layers of late-erupted strombolian scoriae. Major and trace element data are scattered, but define generally linear trends on inter-element diagrams; Sr-isotope ratios do not display significant increase with evolution, although rough positive trends of 87Sr/86Sr versus SiO2 and Rb/Sr can be recognised within some units. The mafic rocks display varying enrichment in potassium, from CA to shoshonitic compositions, and are characterised by variable abundances of incompatible trace elements, which increase with potassium. There is an increase of 87Sr/86Sr ratios and a decrease of 143Nd/144Nd and 206Pb/204Pb ratios from CA to HKCA and shoshonitic mafic rocks. The scattered and incomplete nature of the outcrops make it difficult to constrain magmatic evolution at Panarea; geochemical and isotopic data suggest that AFC and mixing were important evolutionary processes. However, geochemical modelling does not support the possibility that the first-order compositional variations observed in the mafic rocks are the result of these processes, and suggests a genesis in a heterogeneous mantle source. Recent studies have highlighted strong differences in terms of incompatible trace element ratios and isotopic signatures, between the western-central and the eastern Aeolian arc. Rocks from the western islands (Alicudi, Filicudi, Salina, Vulcano) have typical magmatic arc geochemical signatures and relatively unradiogenic Sr-isotope compositions. By contrast, the eastern island of Stromboli has a more radiogenic Sr-isotope signature, and shows trace element abundances and ratios that are intermediate between arc and intraplate compositions. Panarea mafic rocks have geochemical and isotopic signatures that are intermediate between those observed in the two sectors of the arc. The late-erupted CA scoriae of Panarea have trace element and isotopic compositions similar to those of the mafic rocks from the western islands of Filicudi and Alicudi, whereas the HKCA and shoshonitic mafic rocks have isotopic and trace element signatures that are closer to those of Stromboli. This reflects the particular position of Panarea, which is sited midway between the western-central arc and Stromboli. According to some recent views, subduction of the Ionian sea plate is actively occurring beneath the eastern Aeolian arc, with rollback of the subduction zone toward the southeast. The Tindari–Letoianni–Malta Escarpment fault zone is considered to be the boundary between the active subducting plate in the east and the African plate and western Aeolian arc in the west. It is suggested that the rollback of the Ionian plate generated inflow of mantle material from below the western arc into the mantle wedge above the subducting Ionian slab. This situation generated a hybrid mantle beneath Panarea, which resulted in a mixture of western-type and resident eastern-arc mantle materials; the latter had a composition akin to the source of Stromboli magmas. Early HKCA and shoshonitic magmatism tapped such a hybrid source, whereas the younger CA activity has been derived from melting of unmodified western-type mantle material. The late eruption of CA rocks with a composition similar to western arc can be explained by assuming that a continuing inflow process had increased the amount of western-type mantle with time, thus favouring the late appearance of CA magmas. This hypothesis accounts for the overall decrease of potassium with time, which is the opposite of the trend observed in other Aeolian islands.