The first pan-European tournament was the Challenge Cup, a competition between clubs in the Austro-Hungarian Empire. The Mitropa Cup, a competition modelled after the Challenge Cup, was created in 1927, an idea of Austrian Hugo Meisl, and played between Central European clubs. In 1930, the Coupe des Nations (French: Nations Cup), the first attempt to create a cup for national champion clubs of Europe, was played and organised by Swiss club Servette. Held in Geneva, it brought together ten champions from across the continent. The tournament was won by Újpest of Hungary. Latin European nations came together to form the Latin Cup in 1949. After receiving reports from his journalists over the highly successful Campeonato Sudamericano de Campeones of 1948, Gabriel Hanot, editor of L'Équipe, began proposing the creation of a continent-wide tournament. After Stan Cullis declared Wolverhampton Wanderers "Champions of the World" following a successful run of friendlies in the 1950s, in particular a 3–2 friendly victory against Budapest Honvéd, Hanot finally managed to convince UEFA to put into practice such a tournament. It was conceived in Paris in 1955 as the European Champion Clubs' Cup.
The first edition of the European Cup took place during the 1955–56 season. Sixteen teams participated: Milan (Italy), AGF Aarhus (Denmark), Anderlecht (Belgium), Djurgården (Sweden), Gwardia Warszawa (Poland), Hibernian (Scotland), Partizan (Yugoslavia), PSV Eindhoven (Netherlands), Rapid Wien (Austria), Real Madrid (Spain), Rot-Weiss Essen (West Germany), Saarbrücken (Saar), Servette (Switzerland), Sporting CP (Portugal), Stade de Reims (France), and Vörös Lobogó (Hungary). The first European Cup match took place on 4 September 1955, and ended in a 3–3 draw between Sporting CP and Partizan. The first goal in European Cup history was scored by João Baptista Martins of Sporting CP. The inaugural final took place at the Parc des Princes between Stade de Reims and Real Madrid. The Spanish squad came back from behind to win 4–3 thanks to goals from Alfredo Di Stéfano and Marquitos, as well as two goals from Héctor Rial.
Real Madrid successfully defended the trophy next season in their home stadium, the Santiago Bernabéu, against Fiorentina. After a scoreless first half, Real Madrid scored twice in six minutes to defeat the Italians. In 1958, Milan failed to capitalise after going ahead on the scoreline twice, only for Real Madrid to equalise. The final held in Heysel Stadium went to extra time where Francisco Gento scored the game-winning goal to allow Real Madrid to retain the title for the third consecutive season. In a rematch of the first final, Real Madrid faced Stade Reims at the Neckarstadion for the 1958–59 season final, easily winning 2–0. West German side Eintracht Frankfurt became the first non-Latin team to reach the European Cup final. The 1959–60 season finale still holds the record for the most goals scored, but the record is overshadowed by the 7–3 thrashing Eintracht Frankfurt received in Hampden Park, courtesy of four goals by Ferenc Puskás and a hat-trick by Alfredo Di Stéfano. This was Real Madrid's fifth consecutive title, a record that still stands today.
Los Merengues reign ended in the 1960–61 season when bitter rivals Barcelona dethroned them in the first round. Barcelona themselves, however, would be defeated in the final by Portuguese side Benfica 3–2 at Wankdorf Stadium. Reinforced by Eusébio, Benfica defeated Real Madrid 5–3 at the Olympic Stadium in Amsterdam and kept the title for a second, consecutive season. Benfica wanted to repeat Real Madrid's successful run of the 1950s after reaching the showpiece event of the 1962–63 European Cup, but a brace from Brazilian-Italian José Altafini at the Wembley Stadium gave the spoils to Milan, making the trophy leave the Iberian Peninsula for the first time ever. Internazionale beat an ageing-Real Madrid 3–1 in the Ernst-Happel-Stadion to win the 1963–64 season and replicate their local-rival's success. The title stayed in the city of Milan for the third year in a row after Inter beat Benfica 1–0 at their home ground, the San Siro.