Comparison between planktic foraminiferal oxygen isotope records from the Caribbean Sea (Ocean Drilling Program [ODP] Site 999) and the equatorial east Pacific (ODP Site 851) suggests an increase in Caribbean surface-water salinity between 4.7 and 4.2 Ma. The modern Atlantic-Pacific salinity contrast of about 1‰ became fully established at 4.2 Ma as reflected by a 0.5‰ planktic foraminifera 18O enrichment in the Caribbean Sea. This is interpreted as the result of restricted surface-water exchange between the tropical Atlantic and Pacific in response to the shoaling of the Central American seaway. As a consequence, the Atlantic and Pacific surface-ocean circulation regime changed, as did the freshwater balance between the major ocean basins. Simultaneous shifts in benthic carbon isotope records in the Caribbean Sea suggest an intensification in North Atlantic thermohaline circulation. These results indicate that the Panamanian isthmus formation caused several new ocean-atmosphere feedback mechanisms that have affected climate since the early Pliocene.