Panama City, Florida is located on the Gulf of Mexico, in the heart of Florida's Great Northwest. Panama City is the located in Bay County and serves as the county seat. We are located 98 miles southwest of Tallahassee, 81 miles south of Dothan, AL. and 103 miles east of Pensacola. Bay County is 36 miles wide and 44 miles long. Along with Panama City, there are seven other incorporated municipalities in the county. Panama City is well known for its sugar-white beaches and popular tourist attractions. St. Andrews Bay surrounds much of Panama City, providing a protected harbor for facilities at the growing Port - Panama City, USA Complex.