In 1536, the Viceroyalty of New Spain was established. By 1570, the southern part of New Spain was designated the Captaincy General of Guatemala. The area of Nicaragua was divided into administrative “parties” with León as the capital. In 1610, the Momotombo volcano erupted, destroying the capital. It was rebuilt northwest of what is now known as the Ruins of Old León.

During the American Revolutionary War, Central America was subject to conflict between Britain and Spain, as Britain sought to expand its influence beyond coastal logging and fishing communities in present-day Belize, Honduras and Nicaragua. Horatio Nelson led expeditions against San Fernando de Omoa in 1779 and the San Juan in 1780, which had temporary success before being abandoned due to disease. In turn, the Spanish colonial leaders could not completely eliminate British influences along the Mosquito Coast.

The Captaincy General of Guatemala was dissolved in September 1821 with the Declaration of Independence of the Mexican Empire, and Nicaragua became part of the First Mexican Empire. After the monarchy of the First Mexican Empire was overthrown in 1823, Nicaragua joined the newly formed United Provinces of Central America, which was later renamed as the Federal Republic of Central America. Nicaragua finally became an independent republic in 1838.

Rivalry between the liberal elite of León and the conservative elite of Granada characterized the early years of independence and often degenerated into civil war, particularly during the 1840s and 1850s. Invited by the Liberals in 1855 to join their struggle against the Conservatives, a United States adventurer and filibuster named William Walker set himself up as president of Nicaragua, after conducting a farcical election in 1856. Costa Rica, Honduras and other Central American countries united to drive Walker out of Nicaragua in 1857, after which a period of three decades of Conservative rule ensued.

Great Britain, which had claimed the Mosquito Coast as a protectorate since 1655, delegated the area to Honduras in 1859 before transferring it to Nicaragua in 1860.


The Mosquito Coast remained an autonomous area until 1894. José Santos Zelaya, president of Nicaragua from 1893 to 1909, negotiated the annexation of the Mosquito Coast to the rest of Nicaragua. In his honor, the region was named Zelaya Department.

In the 19th century, Nicaragua attracted many immigrants, primarily from Europe. In particular, families from Germany, Italy, Spain, France and Belgium emigrated to set up businesses with money they brought from Europe. They established many agricultural businesses, such as coffee and sugar-cane plantations, and also newspapers, hotels and banks.