The Isthmus of Panama is the umbilical cord joining South and Central America. It borders Costa Rica to the west and Colombia to the east. Panama's arched shape reflects both its role as a bridge between continents and as a passageway between oceans. At its narrowest point, it is only 50km (30mi) wide, but it has a 1160km (720mi) Caribbean coastline on its northern shore and a 1690km (1048mi) Pacific coast to the south. The famous canal is 80km (50mi) long and effectively divides the country into eastern and western regions.

There are hundreds of islands near the Panamanian coasts. The two major archipelagos are the San Blas and Bocas del Toro chains in the Caribbean Sea, though the best snorkeling, diving and deep-sea fishing are to be found in the Pacific near Coiba Island and the Pearl Islands. Panama has flat coastal lowlands and two mountain chains running along its spine. The highest peak is Volcán Barú at 3475m (11,400ft).

Rainforests dominate the canal zone, the northwestern portion of the country and much of the eastern half. Although Costa Rica is widely known for its fantastic wildlife, Panama has, in fact, a greater number of flora and fauna species, more land set aside for preservation and far fewer people wandering through the jungle looking for wildlife and inadvertently scaring it away. There's much truth in the Panamanian saying that in Costa Rica 20 tourists try to see one resplendent quetzal, but in Panama one person tries to see 20 of these exquisite birds.

Panama has two seasons. The dry season lasts from January to mid-April and the rainy season from mid-April to December. Rainfall is heavier on the Caribbean side of the highlands, though most people live on or near the Pacific coast. Temperatures are typically hot in the lowlands (between 21°C and 32°C/70°F and 90°F) and cool in the mountains (between 10-18°C/50-64°F). These vary little throughout the year.

Accommodation tends to be more expensive in Panama than in other parts of Central America; a hotel room that might cost US$6 in Nicaragua or Guatemala might cost US$10 here. If you're traveling on a budget, you'll pay at least US$15 per day for a room and three meals. A moderate budget will be in the range of US$20-30 a day.

Panama uses the US dollar as its currency. The official name for it is the balboa, but it's exactly the same bill. Panamanian coins are of the same value, size and metal as US coins; both are used. In most of Central America, US dollars are the only currency exchanged. In Panama City, however, you can exchange currencies from almost anywhere in the world at a casa de cambio, due to the city's large international offshore banking industry.

You can tip some small change, or around 10% of the bill if you're feeling affluent, in fancier restaurants; in small cafes and more casual places, tipping is not necessary. Haggling over prices is not the general custom in Panama.

Panama's tourist season is during the dry season from around mid-December to mid-April. The weather can be hot and steamy in the lowlands during the rainy season, when the humidity makes the heat more oppressive than otherwise. Rain in Panama tends to come in sudden short downpours that freshen the air and are followed by sunshine. If you'll be doing any long, strenous hiking, the dry season is the most comfortable time to do it; the Darién Gap can be crossed only at this time.

If you like to party, try to be in Panama City or on the Península de Azuero for Carnaval, held each year on the weekend before Ash Wednesday. Panama City's Carnaval celebration is one of the world's largest.