The Piaggio P.32 was developed in response to a 1934 requirement from the Italian Air Ministry for a high-speed medium bomber capable of greater range and velocity than the preceding P.16. Designed by the prominent aeronautical engineer Giovanni Pegna, the aircraft first flew in 1936, with sources citing either early in the year or November. The P.32 was an ambitious design for its era, featuring a mid-to-low-mounted wing equipped with double trailing-edge flaps and Handley-Page leading-edge slats to improve control and takeoff performance. The airframe was designed for a five-man crew and included an internal bomb bay capable of carrying up to 3,520 lb (1,600 kg) of ordnance.
Two primary engine configurations were developed. The P.32-I utilized two liquid-cooled V-12 Isotta Fraschini Asso XI R.C. engines, each producing between 820 and 825 hp. The subsequent P.32-II variant was re-engined with two Piaggio P.XI R.C.40 14-cylinder radial engines, which increased power to approximately 1,000–1,020 hp per engine. In terms of defensive armament, the P.32-I featured a nose turret and retractable dorsal and ventral turrets, all armed with 7.7 mm Breda-SAFAT machine guns.
Production was limited and inconsistent. While some records indicate a production series of 16 aircraft with Isotta Fraschini engines, others note that an additional 10 to 12 radial-engined aircraft were started but never completed. The Regia Aeronautica operated the P.32 within the 47a and 48a Squadriglie B.T. during 1937. However, the aircraft suffered from irremediable control problems and stability issues. Following a series of accidents, the Regia Aeronautica decommissioned the type on April 12, 1938, and cancelled further development, including the P.32bis program. Consequently, the P.32 did not see combat during World War II, as no examples remained in service by the start of the conflict.
Despite its operational failure, the P.32 remains historically significant as an evolutionary step for Piaggio, leading toward the more successful P.108 heavy bomber. No examples of the P.32 are known to survive today.