The seasonal evolution of geostrophic currents in the Panama Bight is derived from satellite‐borne altimeter data. Current literature describes the circulation in the Bight as being cyclonic only. Our study, instead, reveals two distinct seasonal patterns. In summer the circulation in the Panama Bight is anticyclonic, with a coastal current to the south, whereas in winter, the circulation reverses and is cyclonic with a coastal current to the north, and an oceanic upwelling center in the middle of the Bight. A seasonally changing wind field caused by the meridional migration of the Intertropical Convergence Zone, from 8–10°N in summer, to about 2°N in winter, controls the circulation of the basin. In summer southeasterly trade winds dominate the region, but in winter northeasterly trade winds of the North Atlantic, by means of the Panama Jet, enter the region via the Isthmus of Panama.