As president, Mitre pledged to develop Argentina economically through railroad construction and European immigration. He faced lingering opposition in the interior to a political system dominated by Buenos Aires, but conflict with Paraguay brought war on a large scale. In 1865 Argentina, Brazil, and Uruguay declared war on Paraguay. This conflict, known as the War of the Triple Alliance, continued for almost five years until Paraguay was largely destroyed. Despite almost continual warfare, the Argentine economy grew until an economic depression occurred in the mid-1870s. In 1879 General Julio A. Roca led an invasion of the southern Pampas, known as the Conquest of the Desert, in which his troops subdued and destroyed the indigenous peoples and opened vast new areas for grazing and farming.

This campaign marked the beginning of a decade of unprecedented expansion. In 1880 Roca was elected president. Unlike Mitre, who dominated the country from Buenos Aires, Roca drew his power mainly from the provinces, and his victory provoked his opponents in Buenos Aires into revolt. Backed by the army, Roca’s followers put down the rebellion. To placate the people of Buenos Aires, Roca’s government made the city a federal district. This move effectively separated the city of Buenos Aires from the province of the same name. Encarta