quartered white-red-blue-white national flag with two five-pointed stars, one blue and one red. The flag's width-to-length ratio is approximately 2 to 3.

Although there were secessionist movements in Panama when it was part of Colombia during the 19th century, there was no recognized Panamanian flag. In 1903, when the senate of Colombia rejected the proposed treaty with the United States that would have provided for the construction of a Panama canal, Americans aided the Panamanian independence movement, and the Republic of Panama was formed.

Initially a flag design was proposed that utilized the colours of the Colombian flag (Colombia, flag of). It consisted of equal horizontal stripes of red and yellow with a blue canton bearing two linked yellow suns, symbolizing the linking of the two halves of the planet by the future Panama Canal. The flag design that was finally chosen became official on July 4, 1904; it was divided quarterly with two stars. The attributed symbolism was the alternation of the two major political parties in government (originally, red was for the liberals, blue for the conservatives, and white for peace between them), although the colours and stars clearly hinted at the influence of the flag of the United States (United States of America, flag of the). The Panamanian flag was designed by Manuel E. Amador, son of the first president of the new republic.