Goalkeeper Luis Mejia emerged as Panama's penalty hero, saving two spot-kicks as Hernan Dario Gomez's men defeated United States to claim third at the CONCACAF Gold Cup.
After the third-place playoff ended 1-1 through 90 minutes and remained that way following extra time, Mejia saved penalty kicks from Michael Bradley and DaMarcus Beasley to secure a 3-2 triumph in the shootout.
The win provided Panama with a modicum of consolation following its controversial semifinal defeat at the hands of Mexico, but it was another blow to USA coach Jurgen Klinsmann, who was already under severe pressure after his side's shocking last-four loss to Jamaica.
Without first-choice goalkeeper Jaime Peneda and top-scorer Luis Tejada, who were both suspended for their part in the ugly scenes that marred their semifinal, Panama were expected to struggle at a sweltering PPL Park in Philadelphia.
But they enjoyed the better of the 120 minutes against a largely uninspired American side and, had it not been for some incredibly wasteful finishing, would have won with plenty to spare.
The opening quarter produced little in the way of excitement and it was not until after the drinks break that the contest burst into life, as Panama twice came close to snatching the lead shortly before halftime.
First, Armando Cooper weaved his way through the American defense and beat Brad Guzan, only to see his low shot cleared off the line by the alert Tim Ream. Moments later, Roberto Nurse fired wastefully wide after latching on to a fine cross from Miguel Camargo.
Nurse made amends in style on 55 minutes, however, seizing upon some shoddy defending and calmly side-footing past Guzan.
Klinsmann immediately went to his bench, introducing Clint Dempsey and DeAndre Yedlin in quick succession, but it was Panama that continued to look the more threatening – Roman Torres, Alfredo Stevens and Nurse all wasting great chances to double their side's advantage.
Panama was made to pay for its profligacy 20 minutes from time when Klinsmann's two substitutes combined to draw their side level - Dempsey providing the sliding finish after Yedlin had cleverly lured Mejia off his line.
The game then really opened up as the prospect of extra-time loomed, with Guzan doing extremely well to keep Rolando Blackburn's header out before substitute Abdiel Arroyo failed to hit the target when well placed.
Both sides showed understandable signs of fatigue during the additional half-hour, however, which yielded little more than two further chances for Nurse that Guzan kept out.
There was no shortage of drama in the ensuing penalty shootout though, with Meija denying Bradley and Beasley to seal a deserved win for his side.