Photos and video footage show cars floating down streets transformed into rivers as over a metre of rain fell on the city in less than two hours.
People could be seen swimming while trying to escape the flooded streets in the Sicilian capital, with vehicles seen damaged and debris scattered around.
“It all happened in 40 minutes,” a local told Italian daily.
“We were in the car under the bridge and suddenly we saw the water level rising inside the car, starting to touch my children’s feet.
At least two people died in the storm, drowning in their car after it got stuck in an underpass on Viale della Regione.
Two children, the youngest just nine months old, were hospitalised for hypothermia.
“[It’s] the most violent rainfall in the history of the city since at least 1790, equal to that which falls in a year,” Palermo Mayor Leoluca Orlando told local media.
“A rainfall that no one, not even national meteorologists, had foreseen.
“The whole municipality is busy facing this unexpected emergency with the utmost commitment and professionalism, while we wait with apprehension for firefighters to give us news about the people who are still missing.”