The Standard Model of the formation of the Isthmus of Panama proposes that final closure occurred at 4–3 Ma. The model is based on evidence from studies of marine stratigraphy, fossil sequences, divergent molecular phylogenies, the timing of the Great American Biological Interchange (GABI), and proxies for marine paleosalinity, paleobathymetry, productivity, and paleotemperatures. The new model uses cooling of magmas in the Cretaceous to Early Miocene Central American Volcanic arc to propose Eocene emergence of the discrete structural blocks of the arc and then U/Pb dating, paleomagnetic pole rotations, and atlantic sea-floor anomalies to reconfigure the blocks for different time slices back to 25 Ma. Closure is proposed at 15 Ma, because by this time the alignment of the blocks leaves no space for trans-isthmian marine passages. We propose that the Indonesian Australian Archipelago (IAA) provides a model for the Central American arc between 15 and 3 Ma because it accounts for the extensive marine interchange between the Pacific and Indian oceans through few and narrow passages while maintaining a complete separation of the terrestrial faunas (Wallace and Lydekker lines) of the two continental platforms of Sunda and Sahul. Using the Indonesian Volcanic arc as a model, we can now accommodate the general tectonic configuration and much of the emergence of the new model, while accounting for the marine fossil record, the molecular evidence of rapid recent speciation, and the delayed Great American Biotic Interchange that the New Model fails to explain.