The geological development of Panama’s isthmus resulted from intermittent magmatism and oceanic plate interactions over approximately the past 100 m.y. Geochemical data from ~300 volcanic and intrusive rocks sampled along the Cordillera de Panama document this evolution and are used to place it in a tectonic framework. Three distinct trace-element signatures are recognized in the oldest basement rocks: (1) oceanic basement of the Caribbean large igneous province (CLIP basement) displays flat trace-element patterns, (2) CLIP terranes show enriched ocean-island basalt (OIB) signatures, and (3) CLIP rocks exhibit arc signatures. The Chagres igneous complex represents the oldest evidence of arc magmatism in Panama. These rocks are tholeiitic, and they have enriched but highly variable fluid-mobile element (Cs, Ba, Rb, K, Sr) abundances. Ratios of these large ion lithophile elements LILEs) to immobile trace elements (e.g., Nb, Ta, middle and heavy rare earth elements) have a typical, but variably depleted, arc-type character that was produced by subduction below the CLIP oceanic plateau. These early arc rocks likely comprise much of the upper crust of the Cordillera de Panama and indicate that by 66 Ma, the mantle wedge beneath Panama was chemically distinct (i.e., more depleted) and highly variable in composition compared to the Galapagos mantle material, from which earlier CLIP magmas were derived. Younger Miocene andesites were erupted across the Cordillera de Panama from 20 to 5 Ma, and these display relatively uniform trace-element patterns. High field strength elements (HFSEs) increase from tholeiitic to medium-K arc compositions. The change in mantle sources from CLIP basement to arc magmas indicates that enriched sub-CLIP (i.e., plume) mantle material was no longer present in the mantle wedge by the time that subduction magmatism commenced in the area. Instead, a large spectrum of mantle compositions was present at the onset of arc magmatism, onto which the arc fluid signature was imprinted. Arc maturation led to a more homogeneous mantle wedge, which became progressively less depleted due to mixing or entrainment of less-depleted backarc mantle through time. Normal arc magmatism in the Cordillera de Panama terminated around 5 Ma due to the collision of a series of aseismic ridges with the developing and emergent Panama landmass. Younger heavy rare earth element–depleted magmas (younger than 2 Ma), which still carry a strong arc geochemical signature, were probably produced by ocean-ridge melting after their collision.