The surface sediments of the Gulf of Panama consist of a relict sand covering the central and outer portion of the shelf, and nearshore recent fine-grained sediments with local accumulations of coarser sediments. Clays, with occasional patches of rocks and pebbles, are typical of the continental slope. Compositional determinations, including heavy mineral content, and factor analysis of the data indicate that deposition of sand in the central portion of the Gulf was controlled primarily by the topography of the exposed shelf during the last low stand of sea-level. During this time streams distributed sediment from the east and west towards the center of the Gulf. During part of the Pleistocene, the main drainage entering the Gulf through San Miguel Bay passed north of the Archipelago de Las Perlas and across the shelf in the prominent central submarine valley. Presently fine-grained sediments are being transported and deposited in a counter-clockwise direction around the inner part of the Gulf, producing a deposit which is nearly homogeneous in mineralogy. Fine-grained sediment is forming a prism moving out from the shore towards the center of the Gulf; some has bypassed the shelf and is being deposited on the slope. Heavy mineral determinations were made by conventional optical and x-ray techniques. Several difficulties exist in comparing the data and, in particular, in evaluating the x-ray results. However, distribution patterns derived using x-ray peak heights and a Q-mode factor analysis on data from both techniques were compared and showed very good similarity.