Article II of the U.S. Constitution specifies that only "natural born" citizens of the United States are eligible to become president. Does the fact that John McCain was born in the Panama Canal Zone disqualify him?
Probably not. "Natural born" appears only once in the Constitution, as one of three prerequisites for presidential candidates (they must also have lived in the U.S. for more than 14 years and be at least 35 years old). Most constitutional scholars interpret "natural born" to cover everyone who was born an American citizen. This includes 1) people born in the U.S. (including territories such as Guam and the Virgin Islands) to parents of any citizenship; and, 2) people born abroad to American parents. Although the United States governed the Panama Canal Zone as "if it were sovereign" until 1979, it was treated as foreign soil for the purposes of American citizenship. But since McCain's parents were Americans, he was granted U.S. citizenship at birth.
The federal courts have never ruled definitively on the meaning of "natural born" citizenship as it applies to presidential candidates. The issue last surfaced in the 1960s when George Romney, born in Mexico to American parents, and Barry Goldwater, who was born in the Arizona Territory, ran for president.