A biopsy performed by the National Environmental Authority of Panama on the remains a few days after the creature's discovery concluded that the corpse was in fact that of a male brown-throated sloth.

[4] A few days after the photographs were taken, one of the teenagers gave a different account in an interview with Telemetro Reporta, saying "I was in the river and I felt something grabbing my legs ... We took it out of the water and started throwing rocks and sticks at it.

[6] A popular theory was that the Panama Creature was a sloth (perhaps an albino) that had somehow became hairless; proponents of the hypothesis cited the hooked claw visible in one of the photographs.

[6][8] Science author Darren Naish, writing for ScienceBlogs, supported the sloth hypothesis, but had a "difficult time" explaining the creature's hairlessness.

[10] Further Internet speculation led to some proposing that it was in fact a dolphin or a pit bull terrier,[4][10] an example of a species previously unknown to science,[5] or some sort of genetic mutation.

[5] In addition to naturalistic explanations, Billy Booth of About.com reported that "there has been speculation that it is alien, and thereby the connection to UFOs, undersea bases, the whole ball of wax".

André Sena Maia, a veterinarian who works at Niterói Zoo, Rio de Janeiro, Brazil, explained that "most people know how a dead animal looks like in a dry environment", and claimed that "the body must have got stuck under the water, and the movement of the currents gave the false impression that it was alive.