Spanish conquest of the Island began almost twenty years after Colon's first trip, as part of the occupation radiating to the other Caribbean islands. The conquest and control of the Cuban territory was entrusted to Diego Velázquez, one of the richest landowners of La Hispaniola. The whole process started in 1510 with an extensive operation of reconnaissance and conquest plagued of cruel events. Warned of the outrages of the Spaniards in neighboring islands, the aboriginals of the eastern region of Cuba offered resistance against the invasion under the leadership of Yahatuey or Hatuey, a runaway cacique from La Hispaniola, who was finally caught and burnt alive to set an example.

With the foundation in 1512 of the village of Nuestra Señora de la Asunción de Baracoa, the Spaniards began the foundation and establishment of seven villages with the objective of controlling the conquered territory -Bayamo (1513), Santísima Trinidad, Sancti Spiritus and San Cristóbal de La Habana (1514); Puerto Príncipe (1515) and Santiago de Cuba (1515)-, the last one, which was appointed seat of the government. Although almost all these settlements changed their original locations, they were used by the conquerors to exploit the resources of the island.

The economy was based on the slave work of the native Indians, which were assigned to the colonizers by means of a system of "encomienda", a revocable and non-transferable personal concession or grant. According to this system, the colonizer was bound to feed and dress the Indians, and teach them the Christian faith. In turn, the colonizer was entitled to make the Indians work for him and in his benefit. The most important economic activity during the very first years was gold mining, in which assigned Indians worked. Also in this activity were used a few black slaves, who thus integrated, from the very beginning, the ethnic conglomerate which, centuries after, was to form the Cuban population.

Very quickly the gold was exhausted, and the dramatic reduction of the population including the Spaniards who enrolled in the successive conquest expeditions into the continent turned cattle raising in the main source of income in Cuba. Lacking gold, salt beef and leathers would become the almost only commodity with which the few Spaniards living in the country could make a living from, while introducing themselves into the commercial activity of the rising Spanish empire.

Under strict mercantile principles and rules, the Empire’s trade developed as a closed monopoly managed by the Casa de Contratación of Seville. Very soon, other European nations became jealous and anxious to participate in such a prosperous commerce.

To safeguard its trade, Spain decided to organize a system of large fleets that would have a mandatory stop in the port La Habana, a strategically situated in the Gulf Stream.

The settlers in far away regions, who did not enjoy similar benefits, appealed to a highly profitable illegal trade with the same corsairs and pirates. Tight commercial monopoly from Seville was outwitted in a less aggressive way through smuggling. However, colonial authorities, bent on suffocating the illegal trade, clashed with the neighbors, most of all with those from Bayamo. The uprising of the village in 1603 is an early evidence of the differences between "the people from the country" (those who had been born in the Island), and the government of the metropolis. Shortly afterwards, in 1608, one of the contraband incidents served as an inspiration for the poem Espejo de Paciencia (Mirror of Patience), one of the very first works in the history of Cuban literature.