Civil government was set up under the Foraker Act of 1900. The executive branch and upper house of the legislature were appointed by the President of the United States. Puerto Ricans were not granted United States citizenship, although Theodore Roosevelt and Henry L. Stimson urged repeatedly that they should be. The lack of self-government was greatly resented by the Puerto Ricans, and in 1917 a new law, the Jones Act, granted them full United States citizenship and made the upper house elective. However, some Puerto Rican political leaders were not satisfied. One group advocated independence; another, statehood. In 1947 the Jones Act was amended to permit election of the governor, and in 1948 Luis Muñoz Marín, son of Muñoz Rivera, became the first elected governor. Under his guidance, Puerto Rico in 1952 acquired the status of a commonwealth in association with the United States.

In the early 1940's, Puerto Rico was one of the poorest areas of Latin America. The country had a growing population and little industry to provide jobs. Large numbers of Puerto Ricans were migrating to the United States. In 1942, the government began an economic development program, later called Operation Bootstrap. The program attracted industry and improved living conditions; per capita income rose to the highest in Latin America. However, with high unemployment and individual income at only one-third the United States level, Puerto Rico continued to lose people in the 1950's and 1960's.

The U.S. Navy began performing bombing and other training activities on the island of Vieques in 1941. Many Puerto Ricans demanded an end to the exercises. Protests became especially intense in 1999 after a civilian security guard was accidentally killed in a bombing exercise. The Navy left the island in 2003.

In referendums in 1967 and 1972, Puerto Ricans voted overwhelmingly to retain the island's commonwealth status. A small pro-independence movement was responsible for terrorist acts in Puerto Rico and in the United States in the 1970's and the 1980's. Rafael Hernández Colón, who advocated maintaining commonwealth status, was elected governor in 1984 and reelected in 1988. In 1991 a referendum, backed by Hernández Colón, to bar a direct "yes" or "no" vote on statehood was defeated, giving impetus to the cause of statehood. The New Progressive party, which supports statehood, was elected to power in 1992. In a 1993 referendum, however, Puerto Ricans voted to retain commonwealth status and a 1998 referendum had the same result. In 2000, Sila María Calderón became the first woman governor of Puerto Rico.

Another gubernatorial election occurred in Puerto Rico in 2004. The results were close, and a recount of the ballots was ordered. Anibal Acevedo Vilá was declared the winner.

A financial crisis closed government offices and schools in Puerto Rico for two weeks in May, 2006. In November of the same year, Puerto Rico's first sales tax was imposed to generate an increase in public funds.