Many modern scholars derive Pan from the reconstructed Proto-Indo-European god *Péh₂usōn, believed to be an important pastoral deity whose name shares an origin with the modern English word "pasture." The Rigvedic psychopomp god Pushan is considered a cognate, a connection first identified by the German scholar Hermann Collitz in 1924. The familiar form "Pan" contracts from an earlier Παων, derived from the root *peh₂- meaning "guard, watch over," and according to Edwin L. Brown is probably cognate with the Greek word ὀπάων, "companion."

In his earliest literary appearance, in Pindar's Pythian Ode iii. 78, Pan is associated with a mother goddess, perhaps Rhea or Cybele, whom maidens were said to worship together with Pan near Pindar's house in Boeotia.

Pan's worship began in Arcadia, which remained the principal seat of his veneration — a district of mountain people culturally separated from other Greeks. Arcadian hunters were known to scourge the god's statue if disappointed in the hunt.

As a rustic deity, Pan was not worshipped in temples but in natural settings such as caves and grottoes, including the Cave of Pan on the north slope of the Acropolis of Athens. Exceptions included the Sanctuary of Pan in the Neda River gorge in the southwestern Peloponnese, whose ruins survive, the Temple of Pan at Apollonopolis Magna in Egypt, and a sanctuary on Mount Homole in Thessaly. He appeared on the coinage of Pantikapaion in the fourth century BC, and an altar to "Pan Heliopolitanus" was later dedicated at Banyas. In syncretic Hellenistic mystery cults Pan was identified with Phanes/Protogonos, Zeus, Dionysus, and Eros.

His epithets included Aegocerus ("goat-horned"), descriptive of his horned figure; Lyterius ("Deliverer"), honored at a sanctuary in Troezen where he was revered during plagues for revealing remedies in dreams; and Maenalius/Maenalides, derived from Mount Maenalus, which was sacred to him.

Accounts of Pan's parentage vary greatly. According to the Homeric Hymn to Pan he is the child of Hermes and an unnamed daughter of Dryops. Multiple authors make him the son of Hermes and "Penelope" (apparently the wife of Odysseus): Herodotus records this as the Greek belief, and later sources such as Cicero and Hyginus call Pan the son of Mercury and Penelope. Early sources including Pindar and Hecataeus instead identify him as the child of Penelope by Apollo. Apollodorus records two distinct figures named Pan — one the son of Hermes and Penelope, the other born of Zeus and the nymph Hybris, who mentored Apollo. Pausanias relates that Penelope had been unfaithful and was banished to Mantineia upon Odysseus' return.

Other sources, such as Duris of Samos and the commentator Servius, report that Penelope slept with all 108 of the suitors during Odysseus' absence and so bore Pan — a myth reflecting the folk etymology that equates Pan's name (Πάν) with the Greek word for "all" (πᾶν). Smith's Dictionary lists Apollodorus' parents as Hermes and Oeneis, while scholia on Theocritus give Aether and Oeneis.

Like other nature spirits, Pan appears older than the Olympians: he gave Artemis her hunting dogs and taught Apollo the secrets of prophecy. He could be multiplied into the Pans or Paniskoi, and Aeschylus in the Rhesus distinguished two Pans, one son of Zeus and twin of Arcas, the other son of Cronus. Herodotus noted that Egyptian chronology made Pan the most ancient of gods, yet if he was the son of Hermes and Penelope he was born only some eight hundred years before Herodotus, after the Trojan War, marking when the Greeks first learned his name.

Battle with Typhon: The goat-god Aegipan was nurtured alongside the infant Zeus in Crete. During Zeus's battle with Typhon, Aegipan and Hermes stole back the "sinews" of Zeus that Typhon had hidden in the Corycian Cave, and Pan aided the gods against the Titans by letting out a horrible screech that scattered them in terror. Some traditions make Aegipan Pan's son rather than his father. A myth reported as "Egyptian" in Hyginus's Poetic Astronomy explains the constellation Capricornus as a sea-goat: when attacked by Typhon, Pan in his goat aspect dived into the Nile, the part above water staying goat while the submerged part became fish, after which Zeus set his image among the stars.

Erotic aspects: Pan was famous for his sexual prowess and is often depicted with a phallus. The best-known myth concerns the origin of his pan flute: Syrinx, a wood-nymph of Arcadia and daughter of the river-god Ladon, fled his pursuit until her sisters changed her into reeds; when the wind blew through them and made a plaintive melody, Pan, unable to tell which reed she had become, cut several pieces and joined them in decreasing lengths to form the instrument that bears her name. He also loved Echo, the nymph Pitys (who was transformed into a pine to escape him), the moon goddess Selene (whom he lured with a sheep's fleece), and the rustic Daphnis, whom he taught to play the pipes.

Panic: Disturbed during his secluded afternoon naps, Pan's angry shout could inspire panic (panikon deima) in lonely places. He claimed credit for the gods' victory over the Titans by frightening the attackers, and at the Battle of Marathon (490 BC) was said to have favored the Athenians by inspiring panic in Persian hearts.

Music: In the late sources Hyginus and Ovid, Pan replaces the satyr Marsyas in a musical contest. Having boldly compared his music with Apollo's, Pan challenged the lyre-god to a trial judged by the mountain-god Tmolus. Pan played his rustic pipes, pleasing himself and his follower Midas, but Tmolus awarded victory to Apollo; when Midas alone disputed the judgment, Apollo gave him a pair of donkey's ears.

Panes: The Panes were Pan-like spirits who protected herds of goats and flocks of sheep. According to Nonnus in the Dionysiaca, twelve Paneides were "begotten of the one ancestral Pan," and further Panes named Agreus and Nomios were sons of Hermes by two nymphs; these Pans aided Dionysus in his war against the Indians. A local Pan Sybarios, worshipped in the Italian colony of Sybaris, was said to have been conceived when a shepherd-boy named Krathis copulated with a she-goat.

In Plutarch's De defectu oraculorum, Pan is the only Greek god who actually dies. During the reign of Tiberius (AD 14–37), a divine voice hailed the sailor Thamus near the island of Paxi, instructing him to proclaim when he reached Palodes that "the great god Pan is dead"; when he did so, the announcement was met from shore with groans and laments.

Christian apologists such as Eusebius of Caesarea took up the tale, and because the Greek word for "all" is also "pan," a pun arose that "all demons" had perished. Rabelais' Pantagruel read the announcement as referring to the death of Christ, while later figures including Anne Catherine Emmerich and G. K. Chesterton tied Pan's "death" to the coming of Christianity.

Modern scholars offer naturalistic explanations. Robert Graves suggested sailors had misheard the cry of Tammuz worshippers, "All-great Tammuz is dead," while William Hansen showed the story resembles a widespread folktale type called "Fairies Send a Message." The phrase nonetheless appealed to poets such as John Milton, Elizabeth Barrett Browning, and Louisa May Alcott.

Iconography: Representations of Pan — cloven hooves, goat's legs, horns, beast's ears, a saturnine face, and a goatee — strongly influenced the conventional depiction of the Devil, with which his imagery coalesces.

Literary revival: Interest in Pan revived in the late eighteenth century, from Richard Payne Knight's treatment of him as a symbol of creative generation to John Keats's "Endymion" (1818), where, as Douglas Bush notes, the god became "the symbol of the romantic imagination." Between 1890 and 1926 Patricia Merivale identifies a striking resurgence of the Pan motif, surfacing in Arthur Machen's The Great God Pan (1894), the secretive nature-god of Kenneth Grahame's The Wind in the Willows (1908), J. M. Barrie's Peter Pan, Lord Dunsany's The Blessing of Pan (1927), and works by women writers who used him to explore female empowerment and sexual liberation.

Music and revived worship: Pan inspired Claude Debussy's Syrinx and Prélude à l'après-midi d'un faune, Benjamin Britten's Six Metamorphoses after Ovid, and the band Pink Floyd's debut album The Piper at the Gates of Dawn. Revived worship ranged from eighteenth-century Pan processions at Painswick to ceremonies by the occultists Aleister Crowley and Victor Neuburg; and in 1933 Margaret Murray's The God of the Witches helped shape the Neopagan and Wiccan archetype of the Horned God, of which Pan is a principal model.