Founded in 1673, Casco Viejo is Panama City’s most charming neighborhood. Along red cobblestone streets, you’ll find candy-colored colonial buildings housing boutiques, galleries, restaurants and hotels interspersed with yet-to-be-restored structures. The convergence of beautiful and gritty, old and new, is what makes this area of Panama City so exciting. Here are our favorite local stops.

What to See and Do

Casco Viejo’s historic highlights include the gilded baroque altar of Iglesia San José and the ruins of Convento de Santo Domingo, built in 1678. In recent years, the neighborhood has become something of an arts hub. The Museo de la Mola is dedicated to one of the cultural icons of the Guna, an Indigenous group based in the autonomous Guna Yala region on the Caribbean coast.

On display are delicately worked molas, colorful textiles embroidered and collaged using a reverse-appliqué technique. Some pieces have traditional geometric designs, while others reference pop culture. Nearby, the Museo de Arte Contemporáneo, MAC Panamá has a satellite exhibition space with rotating shows and works from its collection.

Where to Shop

If you love crafts and textiles, you may need to pack an extra suitcase to bring home your treasures. Casa Latina, an upscale gallery with beautiful jewelry, colorful masks, handwoven baskets and multihued artwork, is a good place to find unique souvenirs. Rako is a funky gallery selling prints, as well as T-shirts, scarves, mugs and key chains made by owner and artist Andy Rivera. This is a good choice for inexpensive Panama-specific gifts.

It’s also hard to resist the neighborhood’s many colorful clothing boutiques. Standouts include the dazzling resort wear for women at Zunilda Gutiérrez and casual, beachy menswear at Boho Shack. For traditional Panama hats, Victor’s and El Guayacano offer various high-quality designs.

Where to Eat

Plan for at least one meal at Caleta, the Sofitel Legend Casco Viejo’s restaurant that’s helmed by chef Lorenzo Di Gravio. Elegant yet casual Bruma is an excellent spot to escape the midday heat for ceviche and wine, while Fonda Lo Que Hay is one of Panama City’s best restaurants overall, blending Latin American, Asian and Caribbean influences in a lively setting. If you’re in town for more than a couple of nights, it’s worth venturing outside Casco Viejo for modern Panamanian cuisine at Cantina del Tigre or Peruvian and Asian bites at Mai Mai. Read our full restaurant reviews.

Where to Drink

Casco Viejo is Panama City’s nightlife capital. Start the evening with pre-dinner drinks at one of the neighborhood’s many rooftop bars. Tantalo and Casa Casco both offer excellent views and lively music, though the atmosphere skews toward a party scene, with sugary drinks and thumping bass. More relaxed Mazatlán serves excellent drinks — perhaps the best margaritas in town — along with a dazzling panorama of the skyscrapers across the bay.

For sunset sea views, the fifth-floor bar at the Sofitel Legend Casco Viejo is a top choice. Once the sun sets, visit Element, a steampunk-themed bar where bartenders create custom cocktails based on your preferences.

Pedro Mandinga Rum Bar, operated by Panama’s first craft rum distiller, is a buzzy spot for post-dinner drinks, where house cocktails, tropical-print furniture and salsa music lend a festive mood.