The interface between economic globalization and territorial formation has been a fundamental concern to scholars from a wide range of disciplines as both supra‐ and subnational configurations increasingly supplant the role of the nation‐state so as to achieve purported political or economic objectives. Though extensive literatures document this process, considerable lacunae exist with regard to the understanding thereof within a socio‐historical framework. This article invokes the concept of ‘palimpsest’ as a metaphor through which one reads the re‐inscription of multiple layers of the built environment or territory vis‐à‐vis the widespread changes within Panama's ‘transit corridor’ — a densely settled territorial strip extending from the northern city of Colón to Panama City in the south. Though much of this transformation has been attributed to the newfound economic stability of the Panamanian state, I argue that these structural changes are best understood in the context of prior developments on the Isthmus of Panama dating back centuries. To this end, both structural and poststructural arguments are invoked so as to transgress a narrow focus on Panama as a fixed territorial entity.