Mexico Beach is a city in Bay County, Florida, United States. It is located 25 miles southeast of Panama City on the Florida Panhandle. It is part of the Panama City-Panama City Beach, Florida Metropolitan Statistical Area in North Florida. The population was 916 at the 2020 census, down from 1,072 at the 2010 census. The community was extensively damaged by Hurricane Michael on October 10, 2018.