Second-half goals from Jude Bellingham and Harry Kane earned England their second win of the Football World Cup at the New York New Jersey Stadium, ensuring first place in Group L.
Panama frustrated England throughout the first half, making this a much closer contest than the 6-1 defeat they suffered against the same opponents in Russia in 2018.
Bellingham provided the breakthrough after 62 minutes, holding off a defender to volley home from a Bukayo Saka corner.
The midfielder then turned provider, crossing for Harry Kane to head home his 11th World Cup goal and surpass Gary Lineker's previous record.
Following a draw against Ghana, manager Thomas Tuchel made five changes to the starting line-up, handing first starts of the tournament to Morgan Rogers, Marcus Rashford, and Saka.
Rashford created the most significant threats before the break, forcing a full-stretch save from goalkeeper Orlando Mosquera with an early shot before heading over the crossbar from an Elliot Anderson cross.
England dominated possession despite the wet conditions, but found it difficult to break down a well-organised defence.
Panama almost scored after the first hydration break when Jose Luis Rodriguez broke clear on the left, but goalkeeper Jordan Pickford turned his powerful shot behind at the near post.
The pressure on the Panama goal intensified after the interval, with Mosquera producing a flying save to deny Kane shortly before Bellingham opened the scoring.
Panama had a late effort from Jose Fajardo disallowed for offside and exit the tournament without a point or a goal.
England now advance to a Round of 32 match in Atlanta against a third-placed team from Group E, H, I, J, or K.
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