Enter about:config in the URL bar and set browser.download.alwaysOpenPanel = false.

WARNING: Changing preferences through this interface not officially supported Hidden settings edited using the about:config tool are explicitly not supported, which means that Mozilla makes no guarantees they will be supported in the future, or that Mozilla will fix them if they break. Mozilla does not test these preferences, and will not in the future. That includes security and performance testing which these preferences may affect.

[Warning added by moderator]

Doesn't seem to have worked, even after reboot; the list of downloaded files keeps on piling up and hiding the screen. Removed the download icon, and this works, but there is no indication that a download is in progress -- on the task bar. Previous version of Firefox had a clock-like icon showing download progress.

Hmm, it's working for me. Could you double-check:

Hi, there is a hidden setting to control whether the panel opens:

(1) In a new tab, type or paste about:config in the address bar and press Enter/Return. Click the button accepting the risk.

More info on about:config: Configuration Editor for Firefox. The moderators would like us to remind you that changes made through this back door aren't fully supported and aren't guaranteed to continue working in the future.

(2) In the search box in the page, type or paste alwaysOpenPanel and pause while the list is filtered

Firefox should list one matching result, and one line providing the option to define a new preference named alwaysOpenPanel.

(3) Double-click the line for the browser.download.alwaysOpenPanel preference to switch the value from true (open it) to false (do not open it)

General background article on the new download workflow in Firefox 98: How file downloads are handled in Firefox.

Firefox auto-hides the Downloads button on the Navigation Toolbar by default. The Download button should appear on the Navigation Toolbar once you open the Customize window. If you do not see the Download icon then click the Restore Defaults button to reset the layout in case you previously have moved this button. Once you see the Download button in customize mode then left-click this button to see the current auto-hide state and toggle its setting.