This article explores the challenges that Italy poses for existing analyses of western punishment. These ‘challenges’ are visible at the penal level and in relation to the variables used to explain contemporary penal trends. In this article I argue that Italian penality cannot be understood in terms of unequivocal ‘punitiveness’ or unequivocal ‘moderation’. Italian trends betray a co-existence and alternation of repression and leniency, whose incidence I trace in penal reform and legislation. I explore the issue of waning state sovereignty and its presumed contribution to increasing punitiveness, explaining why the evolution of the Italian state does not fit this narrative. I argue that Italy is a contested state, whose penal law can be sidelined by the informal norms with which it co-exists. I also ask whether Italian penality can be explained by reference to political economy. I argue that Italy’s hybrid political economy challenges the methodological approach that predicts punitiveness or moderation by reference to political economic evolution. I conclude by explaining why politics – political dynamics, institutions and culture – is the key organizing principle with which to systematize contemporary Italian penality. I argue that political dynamics should likewise be reconsidered by, and integrated into, existing analyses of western punishment.