Central American Federation or Central American Union, political confederation (1825–38) of the republics of Central America—Costa Rica, Guatemala, Honduras, Nicaragua, and Salvador. United under a captaincy general in Spanish colonial times, they gained independence in 1821 and were briefly annexed to the Mexican empire formed by Agustín de Iturbide. The nations joined in a loose federal state, appointing (1825–29) as first president Manuel José Arce, who was succeeded (1830–38) by the liberal leader Francisco Morazán. Political and personal rivalries between liberals and conservatives, poor communication, and the fear of the hegemony of one state over another led to dissolution (1838) of the congress and the defeat (1839) of Morazán's forces by Rafael Carrera. In 1842, Morazán made an abortive attempt to reestablish the federation from Costa Rica. Later efforts by Nicaragua, Honduras, and Salvador failed, and the attempts of Justo Rufino Barrios (1885) and José Santos Zelaya (1895) only increased existing enmities. At the Central American conference of 1922–23, the U.S. recommendation of a union was not favorably received, partly because of earlier U.S. policies in Panama and Nicaragua. Nevertheless, geography, history, and practical expedience are factors that constantly encourage union. In 1951, the Organization of Central American States was formed to help solve common problems, and in 1960 the five nations established the Central American Common Market.

See T. L. Karnes, The Failure of Union: Central America, 1824–1960 (1961); N. Maritano, A Latin American Economic Community (1970).