In 1892 Jose Marti formed the Cuban Revolutionary Party, which eventually started the second war of Cuban independence in 1895 (Jose Marti was killed in battle the same year). The US initially became involved as a mediator between Spain and its colony. However, when the battleship Maine exploded in Havana Harbor, the United States blamed Spain. Congress passed the Teller Amendment, which said that Cuba has the right to be an independent country, and "that the US has no intention to exercise sovereignty, jurisdiction, or control over said island except for the pacification thereof..." In 1898 (the same year as the explosion of the Maine), America declared war on Spain. Oddly enough, the first battle of the Spanish-American War took place in the Philippines, where US forces captured Manila.

The Cuban revolutionaries and US soldiers defeated Spain in a war that only spanned five months. It ended in August of 1989 with the treaty of Madrid. Spain ceded Puerto Rico, the Philippines, and Guam to the United States. Cuba gained liberation. However, the US army stayed in Cuba in order to set up the new government. It also attached the Platt amendment to the Cuban constitution. This made Cuba a protectorate of the United States, and forbid Cuba to negotiate with any country other than the US. In 1906, the first Cuban election was held; in 1906, the second was stopped by the US in favor of a puppet government.

The Spanish-American War is significant, because it showed the United States to be a true world power. It also put an end to Spain's strength in Latin America; this was another loss to the fading Spanish Empire.

In the same year as the war, Britain relinquished rights to build a canal in the Central American isthmus. In this gesture, England handed control of Latin America to the US. The United States promptly decided to build the Panama Canal. However, at this time, Columbia controlled Panama. The US offers Colombia ten million dollars to allow the canal to be built. The Colombians refused (wanting twenty-five million). Following this refusal, America supported a Panamanian revolt, in which they emerged victorious. The new government granted the US the right to build the canal (which was finished in 1914). America ended up with indefinite use of the Panama Canal (so far).

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