Panama is a town in Le Flore County, Oklahoma, United States. It is share of the Fort Smith, Arkansas-Oklahoma Metropolitan Statistical Area. The population was 1,413 at the 2010 census.

A make known office was customary at Panama, Indian Territory upon January 14, 1898. At the become old of its founding, Panama was located in Skullyville County, part of the Moshulatubbee District of the Choctaw Nation.

This town began as a coal mining community named Red Town because everything of the miners’ shacks were painted red. The pedigree of the town state of “Panama” is uncertain. Some historians allegation that the make known was inspired by the building of the Panama Canal. But back the town was already called Panama by 1898, the inspiration would have to have been based upon the futile French effort at building the canal which started 1881 and curtains in 1889, and not the wealthy American effort which did not Begin until 1904 and was not completed until 1914. In 1896 the Kansas City, Pittsburg and Gulf Railroad (trackage acquired by the Kansas City Southern Railway in 1900) built a north–south stock through the region. The Midland Valley Railroad built an east–west origin through the region in 1903–1904. The town of Panama moved to the crossing of the two railroads. The Panama post office first opened January 14, 1898, but the order was rescinded for some run of the mill reason upon February 23, 1898. The declare office reopened February 21, 1899.

Panama was still supported by coal mining in 1930. The Ozark Coal and Mining Company had established itself there in 1898, however the coal mines began to near in the 1930s. A creosote plant, established in 1937, provided some jobs for the former miners. The Panama Coal Company, which had engaged in strip mining, went bankrupt in 1977.