The Palio of Boats is a competition which takes place every year in Passignano on the last Sunday of July. There are four districts to take over the competition, which are the Centro Storico, Centro Nuovo or Centro Due, the Oliveto and San Donato.

The Palio of Boats recalls the last act of hostilities between the noble families of Perugia: Baglioni and Oddi. In 1495 in Passignano took place a bloody battle in which a small army of the family Oddi had to escape from the castle with the boats on their backs, followed by the militia of the Baglioni and the Della Corgna.

The reenactment – today's competition – is made of three phases. On the first phase the boats of the four districts challenge on the water surface to get to the city's dock. From here, with the boats on the shoulders, begins the race which takes place most entirely in the city center, characterized by a winding and difficult way among steep small streets and staircases. Back to the dock, the competitors get back on their boats to conclude the competition.

During the week that comes first, the Four Districts organize taverns in which visitors can eat typical food from the Trasimeno area and be entertained with shows and costumed historical representations. From Monday to Thursday take place the practices of the Districts to the challenge, while on Friday is disputed the so called general competition. On Saturday evening the Lords of the Districts meet at the city center square for the challenge play. The District that holds the Palio challenges the others to a new challenge.