Administratively, the municipality is divided into four civil parishes (freguesias):[3] The area has been settled since at least Neolithic times, as evidenced by excavations at sites such as the artificial caves of Casal do Pardo and the Castro of Chibanes.

The castle, Castelo de Palmela, offers a unique view of the entire Setúbal Peninsula, Lisbon, and the Atlantic Coast.

It was a strategic location in past centuries and remains a major junction in Portugal's road and rail networks today.

Palmela is home to several multinational industrial units, such as Volkswagen and Coca-Cola, and a significant number of foreign families reside in the area.

In the 1990s, the joint-venture Volkswagen-Ford AutoEuropa vehicle production plant opened to produce the Mk1 MPV, sold under three marques: Volkswagen Sharan, SEAT Alhambra and Ford Galaxy.