An extensive peat deposit on the Caribbean coast near Changuinola, Panama, has developed in an area subject to periodic earthquake-driven coseismic subsidence. Thick, low-ash, low-sulfur peat is accumulating immediately behind an aggrading and prograding barrier system and adjacent to a flood-prone, sediment-laden river. Measurements of changes in local sea level as a result of a recent (April 1991) earthquake reveal 30–50 cm of subsidence, greatest at the southeastern extent of the study area, where the peat surface is submerged to a depth of 3 m beneath the shallow waters of Almirante Bay. Transgression is proceeding from southeast to northwest, parallel to the trend of the coast and the long axes of both the peat deposit and the major sand bodies. In the eastern part of the deposit, the effects of sea-level rise are evident in the degree of humification, mineral matter, and sulfur content of mangrove and back-mangove peats offshore and immediately adjacent to the marine margin, and in peats associated with brackish tidal channels that drain the deposit. However, most of the deposit shows no indications of marine influence, even though ≈40% of the peat is below present sea level. The western section of the deposit has evolved from low-lying palm swamps, which originated in swales on the barrier bar, into an oligotrophic bog plain with a water table elevated 6.75 m above sea level. As the mire evolved, transitions in vegetation resulted in transitions in peat types. Highly humified forest-swamp and palm-swamp peats underlie and surround well-preserved, fibric sedge peats, and create a partial hydrological bounding surface that restricts subsurface drainage from the central bog. The high water table and elevated topography of the mire and the low permeability and erosion resistance of the dense, woody peat effectively insulate most of the deposit from both clastic influx and the extensive intrusion of rising marine waters. It is evident that thick peat, and hence coal, deposits can accumulate due to tectonically driven, punctuated subsidence without leaving a record of high clastic input within the peat, even immediately adjacent to environments of active clastic deposition.