diff --git a/doc/pandas.rst b/doc/pandas.rst
index 1538fced648..70152d01908 100644
--- a/doc/pandas.rst
+++ b/doc/pandas.rst
@@ -151,10 +151,11 @@ However, you will need to set dimension names explicitly, either with the
 Transitioning from pandas.Panel to xarray
 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 
-:py:class:`~pandas.Panel`, pandas' data structure for 3D arrays, has always
+``Panel``, pandas' data structure for 3D arrays, has always
 been a second class data structure compared to the Series and DataFrame. To
 allow pandas developers to focus more on its core functionality built around
-the DataFrame, pandas plans to eventually deprecate Panel.
+the DataFrame, panads has deprecated ``Panel``. It will be removed in pandas
+0.25.
 
 xarray has most of ``Panel``'s features, a more explicit API (particularly around
 indexing), and the ability to scale to >3 dimensions with the same interface.
@@ -172,28 +173,41 @@ So you can represent a Panel, in two ways:
 Let's take a look:
 
 .. ipython:: python
-    :okwarning:
 
-    panel = pd.Panel(np.random.rand(2, 3, 4), items=list('ab'), major_axis=list('mno'),
-                     minor_axis=pd.date_range(start='2000', periods=4, name='date'))
-    panel
+    data = np.random.RandomState(0).rand(2, 3, 4)
+    items = list('ab')
+    major_axis = list('mno')
+    minor_axis = pd.date_range(start='2000', periods=4, name='date')
 
-As a DataArray:
+With old versions of pandas (prior to 0.25), this could stored in a ``Panel``:
+
+.. ipython::
+    :verbatim:
+
+    In [1]: pd.Panel(data, items, major_axis, minor_axis)
+    Out[1]:
+    <class 'pandas.core.panel.Panel'>
+    Dimensions: 2 (items) x 3 (major_axis) x 4 (minor_axis)
+    Items axis: a to b
+    Major_axis axis: m to o
+    Minor_axis axis: 2000-01-01 00:00:00 to 2000-01-04 00:00:00
+
+To put this data in a ``DataArray``, write:
 
 .. ipython:: python
 
-    # or equivalently, with Panel.to_xarray()
-    xr.DataArray(panel)
+    array = xr.DataArray(data, [items, major_axis, minor_axis])
+    array
 
 As you can see, there are three dimensions (each is also a coordinate). Two of
-the axes of the panel were unnamed, so have been assigned ``dim_0`` and
-``dim_1`` respectively, while the third retains its name ``date``.
+the axes of were unnamed, so have been assigned ``dim_0`` and ``dim_1``
+respectively, while the third retains its name ``date``.
 
-As a Dataset:
+You can also easily convert this data into ``Dataset``:
 
 .. ipython:: python
 
-    xr.Dataset(panel)
+    array.to_dataset(dim='dim_0')
 
 Here, there are two data variables, each representing a DataFrame on panel's
 ``items`` axis, and labelled as such. Each variable is a 2D array of the
diff --git a/doc/whats-new.rst b/doc/whats-new.rst
index ccc323c0c02..71ea5865dd7 100644
--- a/doc/whats-new.rst
+++ b/doc/whats-new.rst
@@ -126,6 +126,9 @@ Bug fixes
 - Add explicit pytest markers, now required by pytest
   (:issue:`3032`).
   By `Maximilian Roos <https://github.com/max-sixty>`_.
+- Fix to ensure that xarray can still be imported with pandas 0.25, which will
+  remove `pd.Panel`.
+  By `Stephan Hoyer <https://github.com/shoyer>`_.
 
 .. _whats-new.0.12.1:
 
diff --git a/xarray/core/dataarray.py b/xarray/core/dataarray.py
index 5472f5e7b4d..d41f914bed1 100644
--- a/xarray/core/dataarray.py
+++ b/xarray/core/dataarray.py
@@ -264,7 +264,7 @@ def __init__(
                     coords = [data.index, data.columns]
                 elif isinstance(data, (pd.Index, IndexVariable)):
                     coords = [data]
-                elif isinstance(data, pd.Panel):
+                elif hasattr(pd, 'Panel') and isinstance(data, pd.Panel):
                     coords = [data.items, data.major_axis, data.minor_axis]
             if dims is None:
                 dims = getattr(data, 'dims', getattr(coords, 'dims', None))
@@ -1825,8 +1825,7 @@ def reduce(self, func: Callable[..., Any],
                                    **kwargs)
         return self._replace_maybe_drop_dims(var)
 
-    def to_pandas(self) -> Union[
-            'DataArray', pd.Series, pd.DataFrame, pd.Panel]:
+    def to_pandas(self) -> Union['DataArray', pd.Series, pd.DataFrame]:
         """Convert this array into a pandas object with the same shape.
 
         The type of the returned object depends on the number of DataArray
@@ -1845,8 +1844,9 @@ def to_pandas(self) -> Union[
         # attributes that correspond to their indexes into a separate module?
         constructors = {0: lambda x: x,
                         1: pd.Series,
-                        2: pd.DataFrame,
-                        3: pd.Panel}
+                        2: pd.DataFrame}
+        if hasattr(pd, 'Panel'):
+            constructors[3] = pd.Panel
         try:
             constructor = constructors[self.ndim]
         except KeyError:
diff --git a/xarray/core/merge.py b/xarray/core/merge.py
index 90bd0166425..08391c994bc 100644
--- a/xarray/core/merge.py
+++ b/xarray/core/merge.py
@@ -15,7 +15,9 @@
     from .dataset import Dataset
 
 
-PANDAS_TYPES = (pd.Series, pd.DataFrame, pd.Panel)
+PANDAS_TYPES = (
+    (pd.Series, pd.DataFrame) + (pd.Panel,) if hasattr(pd, 'Panel') else ()
+)
 
 _VALID_COMPAT = Frozen({'identical': 0,
                         'equals': 1,