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Spain founded the region’s first permanent European settlement on the island of Hispaniola in 1493. Rodrigo de Bastidas made Spain’s first claim to Central America in March 1501.

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The king of Spain replaced Balboa with Pedro Arias Dávila, known as Pedrarias. Pedrarias expanded the colony, but was notorious for enslaving and murdering indigenous people.

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In 1519, as governor of Panama, he established Panama City on the Pacific coast and later moved the capital there. In 1524 Pedrarias sent Francisco Hernández de Córdoba to Nicaragua to conquer the region.

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When gold was discovered in Honduras, various Spanish forces fought each other for control of the region. In Costa Rica, the native population strenuously resisted Spanish efforts at conquest. Spain did not establish a permanent colony there until 1561.

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Remote areas of Central America remained outside of Spanish control. This allowed Great Britain to colonize Belize and the Mosquito Coast of Nicaragua. British Honduras (Belize) was the only non-Spanish colony in Central America.

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By the mid-1600s, forced labor, starvation, and European diseases had nearly killed the entire indigenous population. For the Europeans, the drastically reduced numbers of indigenous people meant a labor shortage.

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They began bringing Africans, who had been forcibly captured, enslaved, and transported by ship, to the Caribbean to meet the demand for workers.
In the late 1700s, Africans and indigenous people began to take organized action to free themselves from slavery and European control.

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By 1804, Haiti had won its independence from France. Haitian independence inspired downtrodden people throughout Latin America, but frightened many of the elite who had much to lose. Most Caribbean colonies did not gain independence until the 1900s. Cuba gained self-rule in 1898 as a result of the Spanish-American War, but remained under the protection of the United States until 1902.