Benelli was established in Pesaro, Italy in 1911, which possibly makes it the oldest of Italian motorcycle factories in operation. (Moto Guzzi—the oldest motorcycle factory in non-stop operation—was established in 1921, and Peugeot is the world's oldest and still producing motorcycle factory due to establishing in 1898.) After losing her husband, the widow Teresa Boni Benelli invested all of the family capital into the business in the hope that it would offer stable work for her six sons: Giuseppe, Giovanni, Francesco, Filippo, Domenico and Antonio ("Tonino"). She also sent Giuseppe and Giovanni to study Engineering in Switzerland. Initially the business had 6 employees in addition to the 5 brothers working (Tonino didn't work because he was too young.)

In the beginning, it was just the Benelli Garage, which repaired bicycles and motorcycles, but was already able to produce all of the spare parts needed for repairs. During World War I, Benelli worked hard fixing parts for the Italian machines in war and in 1919 the first motorcycle was presented to the public. In 1920 the company built its first complete engine in-house, a single-cylinder two-stroke 75 cc model, immediately adapted to a bicycle frame. A year later in 1921, Benelli built its first motorcycle, using their own engine which had by then become a 98 cc model.

But the most successful engine, which made Benelli known in the national and international field, was the 175 cm³ 4-stroke with "cascade" distribution and overhead camshaft of 1927, a bold and sophisticated solution that soon became the "trademark" of the Pesaro house. Giuseppe Benelli was inspired by a theoretical study of an engine by Edward Turner published in 1925 in the French magazine Moto Revue. Giuseppe, in order to beat the competition, did not waste time and completely reinterpreted that project introducing an ingenious simple solution to eliminate the negative effects of thermal expansion that afflicted these applications.

The five cylindrical gears with straight teeth of the distribution (one of the crankshaft, three idle, one of the camshaft) were inserted (cascade) in a thin aluminum folder placed on the right side of the engine, on the top of which was mounted the "castelletto" of the distribution with the camshaft and barbells annexed. The whole was fixed to the engine head not rigidly, but leaving the coupling with a degree of freedom. The solution consisted in inserting two screws with the stem partially threaded (columns) in two holes in the castle and screwed on the two of the four prisoners of the thermal head. The threaded part joined firmly to the head, while the part of the threaded screw created a free, but very precise coupling with the two holes in the castle. The screws were tightened so as not to "crush" the castle, but so that they could leave a play of a few tenths of a millimeter sufficient to the two "blocks" (folder-castle/ cylinder-head) to flow over each other in the phase of expansion by the effect of heat, without interfering and creating those deformations that would have made the system unreliable. This solution was patented in 1927 and began the commercial and sporting success of Benelli, which lasted until the outbreak of World War II. (Patent No. 255634 of 29 Oct. 1927 "Arrangement for forming and fixing the transmission box for controlling the distribution shaft at the head in combustion engines")

Two years after that, using a version specially designed for competitions, Tonino "the terrible" took to the track. He displayed an extraordinary natural talent as a rider and embarked on a very successful career which confirmed the company's exceptional capacity for development and production. Riding a Benelli 175, Tonino Benelli won four Italian championship titles in five years: in 1927, 1928 and 1930 with engine single overhead camshaft (SOHC) version, and in 1931 with the double overhead camshaft (DOHC) version. Unfortunately, a bad crash in the GP of the Tigullio in 1932 put an end to his short and brilliant career; on 27 September 1937 Tonino died following a road accident.

As World War II loomed, the Benelli company debuted with a motorcycles with engine four-cylinder in line supercharged 250cc designed for racing with double overhead camshaft, liquid cooled and with a vane compressor, credited with a maximum power of 52 hp at 10,000 rev/min and a maximum speed of 230 km/h. This motorcycle was intended to compete in the 1940 season to try to bissare the Benelli's success in the 1939 Isle of Man TT Lightweight 250 cc race, but the outbreak of the Second World War will frustrate all efforts and this solution (banned in the post-war period) will never be used in official competitions.