The mountain lion was first sighted in late July near the public Dumpster on the north end of town, according to an anonymous call to the police department's answering machine. The cat was sighted again downtown near city hall in late August by a police officer.
The officer did not have time to take a photo of the animal, which darted back into the woods.
Police Chief Dennis Spurrier said the animal has not posed a threat, and he believes it may have left the area.
"With the fish dwindling, I suspect he went back to where there are less people and more food," he said.
Biologists suspect the cougar came over White Pass from British Columbia.
Spurrier said it may be the same cougar spotted several times on the Klondike Highway in the Tutshi Lake area outside town.
--The Skagway News