The disclosure relates to a panel folding machine and method, particularly for large panels. The panel is gripped at opposite leading corners and wound up by spaced rotating drums engaging opposite side edges of the panel. The drums are axially withdrawn, dropping the once-wound panel onto a lateral conveyor, where the panel, initially wound in a somewhat cylindrical form, assumes a flat folded condition. The once-wound panel is conveyed laterally until the leading lateral edge is engaged and gripped by a second stage winding drum, rotatable at right angles to the first drum. The panel is then wound in a second stage, in a generally cylindrical configuration. The second stage winding drum is retractable, and is withdrawn after the second stage winding operation, permitting the twice folded panel to drop onto a support conveyor. While on the support conveyor, the panel is flattened, to form a neat, rectangular product of uniform dimensions, which is then taken away for packaging. The neatness and uniformity of the folding operations makes the equipment easily adaptable for automatic packaging of the folded product.