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On September 15, 1821, the Captaincy-general of Guatemala (formed by Chiapas, Guatemala, El Salvador, Nicaragua, Costa Rica, and Honduras) officially proclaimed its independence from Spain and its incorporation into the Mexican Empire, which was dissolved two years later. This region had been formally subject to New Spain throughout the colonial period, but as a practical matter was administered separately. All but Chiapas soon separated from Mexico after Agustín I from Mexico was forced to abdicate.

The Guatemalan provinces formed the United Provinces of Central America, also called the Central American Federation (Federacion de Estados Centroamericanos). That federation dissolved in civil war from 1838 to 1840 (See: History of Central America). Guatemala's Rafael Carrera was instrumental in leading the revolt against the federal government and breaking apart the Union. During this period a region of the Highlands, Los Altos, declared independence from Guatemala, but was annexed by Carrera, who dominated Guatemalan politics until 1865, backed by conservatives, large land owners and the church.

Guatemala's "Liberal Revolution" came in 1871 under the leadership of Justo Rufino Barrios, who worked to modernize the country, improve trade, and introduce new crops and manufacturing. During this era coffee became an important crop for Guatemala. Barrios had ambitions of reuniting Central America and took the country to war in an unsuccessful attempt to attain this, losing his life on the battlefield in 1885 against forces in El Salvador.

From 1898 to 1920, Guatemala was ruled by the dictator Manuel Estrada Cabrera, whose access to the presidency was helped by the United Fruit Company. It was during his long presidency that the United Fruit Company became a major force in Guatemala.

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