Panama is situated on an isthmus (a narrow strip of land, with sea on either side, linking two larger areas of land). It connects South America and Central America.
The highest point in Panama is Volcan de Chiriqui (3,475 m).
Indigenous groups include the Embera and Wounaan who have inhabited the forests for centuries.
Rodrigo de Bastidas, a Spanish conquistador, arrived in Panama at the beginning of the sixteenth century.
Christopher Columbus also visited the region.
Nunez de Balboa, a Spanish explorer, was the first European to see the Pacific Ocean from Panama (1513).
The Spanish ruled "Panama" and neighbouring countries for three centuries.
British buccaneers were attracted by the wealth accumulated by the Spanish. In 1596 Francis Drake struck the port of Portobelo and in 1671 Henry Morgan burned the original City of Panama.
Following liberation from the Spanish, Panama became part of the Republic of Gran Colombia (Colombia, Ecuador, Panama and Venezuela).
Gran Colombia dissolved in 1830 and Colombia and Panama formed the state of Nueva Granada.
Panama became an independent country in 1903.
The idea of building a canal on the isthmus to connect the Atlantic and Pacific Oceans dates back to the 1840s. France, Britain and the USA were all interested in a canal linking the oceans.
Ferdinand de Lesseps, a Frenchman who built the Suez Canal, made an unsuccessful attempt to construct a canal linking the Atlantic and Pacific Oceans (1879-1889).
In 1903 the United States bought the rights to build the Panama Canal and also gained sovereignty of the Panama Canal Zone, the land either side of the Canal.
Until the opening of the Panama Canal, shipping had to sail round Cape Horn to travel to and from the Pacific and the East Coast of America. The dangers of the Horn restrained trade with the Pacific.
In 1977 General Torrijos negotiated a Treaty that led to the handover of the Canal to Panama at the end of 1999.
The US invaded Panama in 1989; General Noriega, the leader of Panama, was replaced by Guillermo Endara.
In April 2006 Panama released details of an eight-year plan to expand the Panama Canal so it could handle modern super tankers and huge container ships.
In June 2016 a Chinese container ship became the first vessel to use the enlarged Panama Canal.
The Smithsonian Tropical Research Institute has its headquarters in Panama. The Institute is a leading centre for research on the ecology, behavior and evolution of tropical organisms.