The first "Esposizione d'Arte Cinematografica" came into being in 1932 as part of the 18th Venice Biennale (from 6 July to 21 August 1932) under the auspices of Count Giuseppe Volpi di Misurata, President of the Biennale, the sculptor Antonio Maraini, General Secretary, and Luciano De Feo, General Secretary of the International Institute for Educational Cinema, based in Rome. Luciano De Feo was the very first director-selector.
Italy's highest authorities gave their approval to what would rightly be considered the first international event of its type. The 1932 Festival was held on the terrace of the Hotel Excelsior on the Venice Lido, and while at that stage it was not a competitive event, it included foremost films which became classics in the history of cinema: It Happened One Night by Frank Capra, Grand Hotel by Edmund Goulding, The Champ by King Vidor, Frankenstein by James Whale, Zemlja by Aleksandr Dovzenko, Gli uomini, che mascalzoni! by Mario Camerini and A nous la liberté by René Clair. The list of directors included leading names such as: Raoul Walsh, Ernst Lubitsch, Nikolaj Ekk, Howard Hawks, George Fitzmaurice, Maurice Tourner, and Anatol Litvak. The top stars of the moment appeared on the screen, from Greta Garbo to Clark Gable, Fredric March to Wallace Beery, Norma Shearer to James Cagney, Ronald Colman to Loretta Young, John Barrymore to Joan Crawford, and Vittorio De Sica, attracting over 25 thousand spectators.
The very first film to be shown in the history of the Festival was Rouben Mamoulian's Dr. Jekyll and Mr. Hyde, that was screened at 9:15 p.m. on 6 August 1932. In the report taken from 'La Gazzetta di Venezia' we learn that "the screening of the film" was followed by a grand ball in the Hotel Excelsior and "colourful comings and goings of the most exquisite attire". As there were no official awards, an audience referendum was conducted: best director was the Soviet Nikolaj Ekk for Putjovka v zizn, while the best film was René Clair's A nous la liberté.
The second Festival was held from 1 to 20 August 1934 and for the first time it included a competition. 19 countries took part with over 300 accredited journalists. The "Coppa Mussolini" was introduced for best foreign film and best Italian film; however there was no actual jury.
The awards were assigned by the President of the Biennale, after listening to the opinions of both experts and audiences, and in accordance with the "National Institute for Educational Cinema", a branch of the Society of Nations based in Rome. Other awards were the "Great Gold Medals of the National Fascist Association for Entertainment" to best actor and actress. The prize for best foreign film to Flaherty's Man of Aran, was a confirmation of the taste of the time for auteur documentaries.
As of 1935 the Festival became a yearly event (a clear sign of its international success) under the direction of Ottavio Croze. There was an increase in the number of films and countries participating, and the actors' award was renamed "Coppa Volpi". In 1936 an international jury was nominated for the first time and in 1937 the new Palazzo del Cinema was inaugurated (designed by the architect Luigi Quagliata), after a record construction time in line with the modernist trends of the era; with the exception of the years 1940 to 1948, it has hosted the Festival ever since. The Festival expanded: the number of participating countries increased as did the number of films accepted. 1938 meant the first retrospective, devoted to French cinema from 1891 to 1933. Marlene Dietrich came to the Lido, consecrating the star worship that accompanied the Festival.
As regards foreign films, selected by their respective countries until 1956, French cinema in particular, the '30s saw masterpieces the likes of René Clair's A nous la liberté (1932) and Duvivier's Un carnet de bal (1937), La grande illusion (1937) by Renoir, Quai des brumes (1938) and Le jour se lève (1939) by Marcel Carnè. The Italian award-winning films between 1937 and 1942 were works of propaganda, even if by outstanding directors such as Goffredo Alessandrini and Augusto Genina. The Festival was held three times during the Second World War, from 1940 to 1942 (not counted in the total number of festivals), with screenings temporarily held at the cinema San Marco in Venice, and participation limited to the member countries or sympathisers with the Alliance.