The Costa Rican civil war erupted in 1948, after incumbent Dr. Rafael Angel Calderon and the United Social Christian Party refused to relinquish power after losing the presidential election. An exile named Jose Maria (Don Pepe) Figueres Ferrer managed to defeat Calderon in about a month, and he later proved to be one of Costa Rica's most influential leaders, as head of the Founding Junta of the Second Republic of Costa Rica.

Under Ferrer's leadership, the Junta made vast reforms in policy and civil rights. Women and blacks gained the vote, the communist party was banned, banks were nationalized, and presidential term limits established. Ferrer was immensely popular, creating a political legacy that firmly cemented Costa Rica's liberal democratic values.

In 1987, Costa Rican President Oscar Arias Sanchez garnered world recognition when he was awarded the Nobel Peace Prize for his work in ending the Nicaraguan civil war. During that conflict, both the Sandanistas and the Contras set up military bases in the northern area of Costa Rica, and Arias was elected under the promise that he would work to put an end to this situation. He was able to get all five Central American presidents to sign his peace plan, and Nicaragua is now experiencing relative stability.