Nearly 500 rivers lace Panama's rugged landscape. Mostly unnavigable, many originate as swift highland streams, meander in valleys, and form coastal deltas. However, the Río Chepo and the Río Chagres are sources of hydroelectric power.

The Río Chagres is one of the longest and most vital of the approximately 150 rivers that flow into the Caribbean. Part of this river was dammed to create Gatun Lake, which forms a major part of the transit route between the locks near each end of the canal. Both Gatun Lake and Madden Lake (also filled with water from the Río Chagres) provide hydroelectricity for the area of the former Canal Zone.

The Río Chepo, another major source of hydroelectric power, is one of the more than 300 rivers emptying into the Pacific. These Pacific-oriented rivers are longer and slower running than those of the Caribbean side. Their basins are also more extensive. One of the longest is the Río Tuira, which flows into the Golfo de San Miguel and is the nation's only river navigable by larger vessels.

Mangrove swamps occur along parts of both coasts, with banana plantations occupying deltas near Costa Rica. In many places, a multi-canopied rain forest abuts the swamp on one side of the country and extends to the lower reaches of slopes in the other.