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The late Miocene was an important time to understand the geological, climatic, and biotic evolution of the ancient New World tropics and the context for the Great American Biotic Interchange (GABI). Despite this importance, upper Miocene deposits containing diverse faunas and floras and their associated geological context are rare in Central America. We present an integrated study of the geological and paleontological context and age of a new locality from Lago Alajuela in northern Panama (Caribbean side) containing late Miocene marine and terrestrial fossils (plants, invertebrates, and vertebrates) from the Alajuela Formation. These taxa indicate predominantly estuarine and shallow marine paleoenvironments, along with terrestrial influences based on the occurrence of land mammals. Sr-isotope ratio analyses of in situ scallop shells indicate an age for the Alajuela Formation of 9.77 ± 0.22 Ma, which also equates to a latest Clarendonian (Cl3) North American Land Mammal Age. Along with the roughly contemporaneous late Miocene Gatun and Lago Bayano faunas in Panama, we now have the opportunity to reconstruct the dynamics of the Central America seaway that existed before final closure coincident with formation of the Isthmus of Panama. [ABSTRACT FROM AUTHOR]