After the Jesuits left, the Spanish and later the Mexicans had little to do with the northeastern corner of the Baja California peninsula, perceiving it as an untamable, flood-prone desert delta. Around the time of the U.S. Civil War, a Yale geologist, while surveying a route for the Southern Pacific Railroad, wandered into the delta and discovered what the dwindling population of Yumanos had known for centuries: the 2.5-km-thick sediment was prime farming soil. The sediments extended far to the west of the river itself, accumulating in a shallow basin below the Sierra de Cucapá. All it needed was the addition of water to become an agricultural miracle.
In 1900 the U.S.-based California Land Company received permission from the Porfirio Díaz government to cut a canal through the delta's Arroyo Alamo, thus linking the dry basin with the Colorado River. To attract farmers to the area, the developers named the basin the Imperial Valley. In March 1903, the first 500 farmers arrived; by late 1904, 100,000 acres (405 km²) of valley were irrigated, with 10,000 people settled on the land and harvesting cotton, fruits, and vegetables. A collection of huts and ramadas that straddled the border was named Calexico on the U.S. side, Mexicali on the Mexican side. Seeing that the equally fertile Valle de Mexicali lay undeveloped, another U.S. land syndicate, the Colorado River Land Company, moved in. Led by Harry Chandler, then publisher of the Los Angeles Times, the syndicate controlled some 800,000 acres (3200 km²) of northern Baja and in 1905 began constructing a Valle de Mexicali irrigation system. Instead of using Mexican labor, as the Imperial Valley developers had, Chandler imported thousands of Chinese coolies. After a major 1905 rainfall, the channel dug from Arroyo Alamo ended up diverting the entire outflow of the Colorado River into the Imperial Valley, taking Mexicali with it — unknowingly, the syndicate had tapped into one of the river's original routes. The Salton Sink, a dried-up remainder of the Sea of Cortez, became the Salton Sea virtually overnight.

Neither the U.S. nor Mexico wanted to take responsibility for the growing "New River" created by Chandler's mistake. As both valleys became increasingly inundated, the Southern Pacific Railroad stepped in and, to protect its tracks, dumped a sufficient amount of rock into the river to head the Colorado back into the Cortez, leaving a canal to the Valle de Mexicali. From then on, both valleys became highly productive agricultural centers.
Mexicali was born on 14 March 1903 with Manuel Vizcarra as the town's first authority and assistant judge ("juez auxiliar"). Mexicali is now the capital city of Baja California, the 29th state of Mexico. Shortly after the first irrigation canals were built, most of the land was bought by the Colorado River Land Company from the USA the Company developed commercial crops and became almost a monopoly until it was decided to sell its land to Mexican farmers in 1936 and 1937.
The Mexicali Valley is the agricultural heart of the state, with more than 2,000 square kilometers of irrigated land. This valley is responsible for some of the biggest crops in Mexico, including wheat and cotton. With an ensured supply of water, Mexicali has become an important exporter of asparagus, broccoli, green onion and radish for the whole world.
Cotton became the most important crop of the Valley and it helped to develop the dressing and textile industries. In the early 1950s, the Mexicali Valley became the biggest cotton producing zone in the whole country. Production increased even more in the mid 1960s, reaching more than half a million parcels harvested in just one year.