The prepositural church of Palazzuolo is dedicated to Saint Stephen the Protomartyr
Some archaeological evidence suggests that it was of ancient origin, but there are no traces of the first construction, as the building over the centuries underwent profound alterations due to the serious damage caused by landslides and earthquakes.
In 600 it was practically rebuilt and of these works remains in a plaque walled on the entrance portal. Other works were carried out in 1800 and 1946 to repair the damage suffered during the war.
The first documentary source dates back to 1285 when it is attested that the church of Santo Stefano belonged to the Pagani da Susinana family, and depended on the Pieve di Misile.
Santo Stefano has a simple architectural structure with a single nave and several side chapels. Inside there are valuable works such as an interesting seventeenth-century glazed ceramic ciborium, located next to the high altar, which recalls the manufacture of Dalla Robbia, from the church of Misileo.
Also from this church comes a valuable altarpiece on wood, dated 1511, painted in tempera by a pupil of the Florentine workshop of Ghirlandaio, probably Bastiano Mainardi. It represents the Madonna and Child enthroned among the saints Benedetto, Michele Cassiano, Zanobi, Cristoforo and Domenico.
The painting has been recently restored. The church also preserves various paintings from the rural churches of the area now closed to worship.
In the first chapel on the left, just after the entrance, we can admire a valuable polychrome ceramic baptismal font, attributed to the ceramist Tito Chini. The work created in the mid-1920s, comes from the parish church of Salecchio and has been recently relocated in the church of Santo Stefano, after a laborious restoration.