He was appointed Ambassador Extraordinary and Plenipotentiary of the United States to Panama on 6 May1965, presenting his credentials to President Marco Aurelio Robles Méndez on 13 May1965. He left the post on 6 September1969. In 1966, Panamanian students demonstrating against the United States threw a milk carton filled with red paint, striking Adair in the back. But before his departure, he was able to rebuild relations between the two nations and initiate talks that ultimately led to the return of the Panama Canal to Panamanian authority.