Silicified woods from near the town of Ocú on the Azuero Peninsula, Panama were first reported by Stern and Eyde in 1963; however, the significance of these fossils has been largely overlooked. Well-characterized fossil floras from Central America can be used to test hypotheses related to the historical biogeography and paleoclimate of the Neotropics. We describe 10 new wood types and one palm based on 22 samples from Oligo-Miocene deposits. Affinities at the family/order level include Fabaceae, Lauraceae, Moraceae, Sapotaceae, Euphorbiaceae, Arecaceae, Sapindales, Ericales, and Humiriaceae. The fossil woods are fragmentary and have not been found in-place, but the size and angularity of the specimens suggests minimal transport from the site of growth. We compared these woods with calcareous woods from the Lower Miocene Cucaracha Formation and silicified woods from the upper Miocene Alajuela Formation using Rare Earth Element (REE) analysis to test the hypothesis that the Ocú woods were preserved under uniform conditions and not reworked. Although the results were ambiguous with respect to the original hypothesis, we note that the REE concentrations in silicified woods are much lower than in calcareous woods. We used comparative analysis of wood anatomical features to draw conclusions about the paleoclimate from the fossil flora. All the dicot woods are diffuse porous and none have distinct growth rings; some have very wide vessels at low frequencies. These features are typical of canopy trees in tropical lowland forests. Nonmetric multidimensional scaling of wood anatomical characters from a variety of communities and ecological categories showed that the anatomy of the Ocú woods is most similar to that found in tropical rainforests. Based on the combination of taxonomic identity and functional anatomy, we interpret these fossils as evidence for humid to perhumid megathermal climate in Panama during the late Paleogene-early Neogene.