In 1931, a serious disagreement between leading board member Apostolos Nikolaidis from one side, and some players (most notably Angelos Messaris) and clubs officials on the other side, regarding the professionalization in the Greek football, which lasted two years, damaged the club and led to a counterproductive period. In the meantime, the HFF Greek Cup had commenced in 1932. The last bright moment for the Greens before World War II was winning the Cup for the first time in 1940 against Aris, 3–1.



n 1940, with the break out of the Greco-Italian War, many players of the club joined the Hellenic Army. Mimis Pierrakos was killed during the war (later, during the 1950s, his bones were transferred from Albania back to Athens). During the Axis Occupation of Greece from 1941 to 1944, many players of the team became members of United Panhellenic Organization of Youth (PEAN) resistance organization., while Michalis Papazoglou had a leading role in the resistance group of Jerzy Iwanow-Szajnowicz.



After this long crisis period, Panathinaikos had to wait until 1949 to win again a Greek Championship under the guidance of the Austrian coach Johann Strnad. That same year, Vangelis Panakis and Kostas Linoxilakis came to the club and quickly became the sides new star players. Panathinaikos was again champion for the 1952–53 Panhellenic Championship.

Until 1959, the team had also won seven of the last eight Athens Championships, the regional championships organised in Greece. In 1959, Mimis Domazos, the emblematic captain of the team, made his first appearance with Panathinaikos and the same year took place the first season under the new system of Alpha Ethniki (1959–60 Alpha Ethniki). Panathinaikos was the champion team.