The fort's ruins and the village site are located about 8 miles (13 km) west of Colón, on a promontory overlooking the mouth of the Chagres River.

[2] By 1534, the Monarchy of Spain had, following its conquest of Peru, established a rainy-season gold route over the isthmus of Panama—Camino Real de Cruces—using mule trains and the Chagres River.

Set on a cliff overlooking the entrance to the harbor, the fort was protected on the landward side by a dry moat with a drawbridge.

[2] By the middle of the 18th century, however, the Spanish had largely abandoned both of the old trails over the isthmus, preferring to sail around the tip of South America at Cape Horn.

Westbound prospectors who preferred to avoid crossing the "Great American Desert" or rounding Cape Horn would follow the old path of the Las Cruces Trail, beginning their transcontinental journey at "Yankee Town"[7] or "Yanqui Chagres"[8]—the wild-west boomtown that sprang up on the bank opposite the original village and fortress.

[11] In 1980, UNESCO declared Fort San Lorenzo, together with the fortified town of Portobelo about 30 miles (48 km) to the northeast, to be a World Heritage Site under the name, "Fortifications on the Caribbean Side of Panama."

The organization describes the fortifications as follows: "Magnificent examples of 17th- and 18th-century military architecture, these Panamanian forts on the Caribbean coast form part of the defence system built by the Spanish Crown to protect transatlantic trade.