Geologically speaking, Panama is the youngest part of the Central American Isthmus, having arisen from the sea just three million years ago. Teeth from the Melagordon, an ancestor of the white shark, as well as fossil banks in the Gatun Formation have been found here. Panama is the site of the "Great Interamerican Exchange" between the flora and fauna of the southern and northern halves of the Americas, and its recent history has been marked by its role as a link between the Atlantic and Pacific oceans. The San Lorenzo Protected Area, which surrounds the lower part of the Chagres River, has been over the years a strategic spot for the exchange between the oceans.

For the Spanish conquistadors it was essential to find a route of communication between the two oceans that would link Spain with the recently conquered lands of Peru and Bolivia. The Chagres River played this role since 1503, becoming the main gate of the Americas on the Atlantic. It took one month to move people and goods from the mouth of the river to the town of Venta de Cruces, near today¿s Gamboa, where the route continued by land, on mules, to Panama City on the Pacific Ocean. It was also the richest trade route of Spain, through which the riches of South America were taken to Portobelo, where the great exchange fairs between Spain and its colonies were celebrated for some 200 years. Soon, the mouth of the Chagres came under threat of pirates and buccaneers, and in 1595, by order of Phillip the Second of Spain, Fort San Lorenzo Castle was built on the side of a steep cliff with the purpose of defending this strategic spot. San Lorenzo, Portobelo and Panama City, strategic sites of Spanish trade, were regarded as the "three keys" of the Americas. But the Fort deteriorated quickly, given its feeble construction and the constant attacks of pirates which could barely be contained: Francis Drake conquered it in 1596; Henry Morgan attacked it violently between 1668 and 1671, overpowering it and later destroying Panama City after going up sailing through the Chagres River.

In 1680 a new fortification was built on the highest part of the cliff, to be destroyed by the British Admiral Vernon in 1740. In 1761 the Spaniards rebuilt the Fort for the third time, building the structures seen today. But trade routes had changed and the new Fort didn't suffer any new attacks.

Fort San Lorenzo was abandoned by Spain in 1821 when Panama became independent. After Panama became part of Colombia, it was used as a prison, then as the point of entry for mail coming from England to Latin America. During the Californian Gold Rush in 1849 it served as a camping ground for adventurers, particularly on the old town of Chagres below the Fort and on the west bank of the Chagres River remained. The Chagres River stayed as the main interoceanic route until the construction of the railroad from Manzanillo Island (now Colon City) to Panama in 1850.

Activities in the area increased again during the French effort to build a Canal through Panama, headed by Count Ferdinand De Lesseps, between 1880 and 1889. The excavations seen today between the Gatun Locks and Sherman, as well as the lighthouse in Punta Toro were built in this period.

The new Republic of Panama declared the Royal Castle of San Lorenzo of Chagre a National Historic Monument in 1908, but in 1911 it became part of the Canal Zone, under the jurisdiction of the United States, until 1979. Together with Portobelo, It was declared a World Heritage Site by UNESCO in 1980.

The United States took over the Canal construction in 1903, concluding the works successfully in 1914. The nearby town of Escobal was founded by communities that became flooded by the new artificial lake made for the Canal.

Fort Sherman was built in 1911 as part of the defense system of the Panama Canal, with the main mission of defending the Atlantic side of the Canal. A series of coastal defense batteries were built on Panamanian coasts near the Canal during the First World War. The batteries on Fort Sherman and the San Lorenzo Protected Area (Batteries McKenzie, Pratt, Howard, Baird, Stanley, Mower and Kilpatrick) are in good condition and their history turns them into fascinating places. Changes in war technology made them obsolete for defense purposes, but they were used for military training until March 1999.

From 1951 Fort Sherman and the area's forests were used for jungle warfare training of US troops. In 1963, these operations came under the responsibility of the new US Army School of the Americas in Fort Gulick. Five years later the Jungle Operations Training Center was created as an independent entity. Fort Sherman became the main jungle operations school for the US Army, and allied Latin American armies, where troops headed for Vietnam and other jungle conflict areas were trained.

On June 30, 1999, under the Torrijos-Carter treaties, the area was handed back to the Panamanian Government and the US military left the zone. The San Lorenzo Protected Area was created by Law 21 of 1997, the Land Use Plan of the Interoceanic Region.