Is John McCain eligible to be President?

Under the Constitution, the President must be a "natural born Citizen" of the United States.

But McCain was not born in the United States. He was born in the Panama Canal Zone on Aug 29, 1936 at the Coco Solo Naval Hospital; at the time of McCain's birth was NOT located within the Canal Zone. (It was later added to the Zone by Franklin Roosevelt through EXECUTIVE ORDER 8981 on Dec 17, 1941, when McCain was 5 years old.)

Therefore John McCain is not a citizen "by birth" or a "natural born Citizen."

Instead, McCain is a citizen "by law" because his parents were both American citizens.

The Supreme Court has never decided whether a citizen "by law" is eligible to be President, because no citizen "by law" has ever won a Presidential election.

• Barry Goldwater, who ran in 1964, was born in Arizona while it was still a U.S. territory. Although Arizona was not a state, it was a fully organized and incorporated territory of the United States, making it debatable whether or not he was born outside the United States.
• George Romney, who ran in 1968, was born in Mexico to U.S. parents. Romney’s grandfather emigrated to Mexico in 1886 with his three wives and children after Utah outlawed polygamy. Romney's parents retained their U.S. citizenship and returned to the United States in 1912. Romney was 32 years old when he arrived in Michigan.
• Franklin D. Roosevelt Jr. was once viewed as a potential successor to his father, but was seen by some as ineligible since he had been born on Campobello Island in Canada.

Several federal lawsuits have been filed that challenge McCain's eligibility:

• Nashua NH
• Riverside CA 

More info:

• Wikipedia: Natural Born Citizen
• New York Times 2/28/08: McCain’s Canal Zone Birth Prompts Queries About Whether That Rules Him Out