Following the discreet sales success of the P.136 amphibian aircraft, using its gull wings and engines, Piaggio presented the P.166 in 1957, a light twin-engine aircraft to be offered to civil operators.

The first mass-produced version had good distribution in the United States and Australia, as well as in Italy. 

The military version, the P.166 M, requested by the Air Force and produced in over 50 units, was used as a trainer aircraft by the Multi-Engine Training School/Advanced Basic Rotary Wing Flying School in Latina, in liaison departments of the three Air Regions, and for aerial photography.

The P.166 proved to be a good aircraft, robust, reliable and with a long operational life. A radical development of the airframe occurred in 1978 with the production of the P.166-DL3, equipped with a pair of 587 hp Avco Lycoming turboprop engines.