A newly discovered sequence of lower to middle Miocene rocks from the eastern Bocas del Toro archipelago, western Panama, reveals the timing and environment of the earliest stages in the rise of the Isthmus of Panama in this region. Two new formations, the Punta Alegre Formation (lower Miocene, Aquitanian to Burdigalian) and the Valiente Formation (middle Miocene, Langhian to Serravallian), are here named and formally described. The Punta Alegre Formation contains a diagnostic microfauna of benthic and planktic foraminifera and calcareous nannofossils that indicate deposition in a 2000-m-deep pre-isthmian neotropical ocean from as old as 21.5–18.3 Ma. Its lithology varies from silty mudstone to muddy foraminiferal ooze with rare thin microturbidite layers near the top. The Valiente Formation, which ranges in age from 16.4 to ca. 12.0 Ma, lies with slight angular unconformity on the Punta Alegre Formation and consists of five lithofacies: (1) columnar basalt and flow breccia, (2) pyroclastic deposits, (3) coarse-grained volcaniclastic deposits, (4) coral-reef limestone with diverse large coral colonies, and (5) marine debris-flow deposits and microturbidites. These lithofacies are interpreted to indicate that after ca. 16 Ma a volcanic arc developed in the region of Bocas del Toro and that by ca. 12 Ma an extensively emergent archipelago of volcanic islands had formed. ³⁹Ar/⁴⁰Ar dating of basalt flows associated with the fossiliferous sedimentary rocks in the upper part of the Valiente Formation strongly confirms the ages derived from planktic foraminifera and nannofossils. Paleobathymetric analysis of the two new formations in the Valiente Peninsula and Popa Island, in the Bocas del Toro archipelago, shows a general shallowing from lower- through upper-bathyal to upper-neritic and emergent laharic and fluviatile deposits from ca. 19 to 12 Ma. The overlying nonconformable Bocas del Toro Group contains a lower transgressive sequence ranging from basal nearshore sandstone to upper-bathyal mudstone (ca. 8.1–5.3 Ma) and an upper regressive sequence (5.3–3.5 Ma). A similar paleobathymetric pattern is observed from the Gatun to Chagres Formations (12–6 Ma) in the Panama Canal Basin area and in the Uscari, Rio Banana, Quebrada Chocolate, and Moin Formations (8–1.7 Ma) in the southern Limón Basin of Costa Rica.