In September and October 1968, an epidemic of Asian influenza occurred in the Panamá Canal Zone. An agent isolated from several acutely ill patients was found to be a new variant of A2 influenza virus related to the Hong Kong strain, which had caused major outbreaks in the Far East just a few months earlier. Review of Canal Zone hospital and health clinic records showed a marked increase in outpatient attendance for respiratory illnesses, but no increase in hospitalized cases. Retrospective serologic surveys done in several communities in the Canal Zone showed attack rates of 36 to 73 per 100 in adults and 17 to 46 per 100 in children. The oldest age groups had the highest antibody rates and a higher incidence of pre-epidemic antibodies to the new agent. On the basis of inpatient hospital statistics, the 1968 epidemic was less severe than that of 1957, which was caused by the original A2 virus.