Entoloma (Agaricales, Basidiomycota) is a species-rich genus with approximately 2000 species known worldwide. In Central America, however, information about the species of this genus is sparse, despite the generally high biodiversity in this region. Recently, 124 specimens of Entoloma were collected in Panama, Chiriquí Province. In the present publication, the morphology of 20 species represented by more than one specimen is described and depicted with photographs, line drawings, and scanning electron micrographs. Molecular phylograms based on ITS or concatenated ITS and partial nc LSU rDNA sequences are provided. The taxonomic status of these species is evaluated and 17 species of Entoloma are described as new to science. Only one species could be assigned to an already known species, viz. Entoloma belouvense. Nolanea albertinae, described from Brazil, appeared similar and is combined in E. belouvense on varietal level. The identifications of two further species are uncertain. At least 30 other species, including potentially new species, cannot formally be described due to insufficient material. A preliminary key to the species of the genus Entoloma in Panama is provided. The spatial shape of the polyhedroid basidiospores of Entoloma spp. is discussed based on literature and the micrographs generated for the present study. Our re-evaluations indicate that the type of polyhedroid basidiospore and the structure of its base are not reliable as diagnostic characters for the delimitation of subgenera in Entoloma.