Panarea is the second smallest (after Basiluzzo) of the eight Aeolian Islands, a volcanic island chain north of Sicily. It is a frazione of the comune of Lipari. There are currently about 280 residents living on the island year-round; however the population increases dramatically in summer with the influx of tourists. In recent years, the island has become known internationally for its celebrity visitors.
The Aeolian Islands or Lipari Islands (Italian: Isole Eolie, pronounced [ˈiːzole eˈɔːlje], Sicilian: Ìsuli Eoli) are a volcanicarchipelago in the Tyrrhenian Sea north of Sicily, named after the demigod of the winds Aeolus. The locals residing on the islands are known as Eolians (Italian: Eoliani). The Aeolian Islands are a popular tourist destination in the summer, and attract up to 200,000 visitors annually.