During the French and Indian War, the French ceded the land of Lousiana to Spain in the 1762 Treaty of Fontainebleau, so the British would not acquire the area. This was kept secret until France negotiated peace with the British in 1763 at the Treaty of Paris. The Spanish planned for Louisiana to be a military colony, in order to keep their fruitful mines that extended as far West as the Mississippi River safe. The area of Louisiana stretched north to the upper Mississippi River where French fur-trading settlements were located, and west into the Texas borderlands. It was sparsely populated with the colony's nonative inhabitants numbering around 7,500, a third of these being enslaved Africans. The colony's economy was based on the trade of furs and subsistence crops between the Indians and settlers.

        In the New Orleans area of Louisiana a growing white creole merchant-planter class had emerged in the years before. Born mostly by French and Germans, this class had social supremacy over Louisiana and the officials sent from Europe. Years of French neglect allowed them to create a council called the Superior Council. This council dominated the colony, and because of Spanish expansion into the area, would rebel against Spanish rule when they arrived.

        It started with Antonio de Ulloa who was sent by the Spanish to New Orleans in March 1776 to take control of the colony. However, Ulloa lacked a military force to take control, this is why for the next two years he ruled through the current French governor, Charles-Phillippe Aubry. Through him Ulloa attempted to institute mercantilistic ideas and weaken the authority held by the Superior Council. In response the Council banished Ulloa in November 1768. Afterwards Spain then sent Alejando O'Reilly in August 1769 with 2,00 troops. Immediately after proclaiming Spanish sovereignty, O'Reilly abolished the Superior council, arresting six of the leaders and killing five by firing squad. This event in history has been portrayed many times as the creation of a heartless dictatorship with "Bloody O'Reilly" at its head because of his violent elimination of the revolt. After 1768, Louisians chose to live comfortably and prosperously under the rule of the Spanish.

        For six months O'Reilly stayed in Louisiana. He designed colonial government subordinate to the governor-general of Cuba, and daily governance became the job of the newly formed Cabildo, which was a municipal council and judicial system. For Louisiana's merchants Havana became their main trading center. The O'Reilly Code was created and in it French Law was adapted to accomodate Spain's. Indian slavery was banned and the colony was divided into parishes. Overall because of Spanish rule, about every aspect of Louisiana's civil life had been molded and changed.