Mambo was very jazz-influenced, and it was the mambo big bands that kept alive the large jazz band tradition while the mainstream current of jazz was moving on to the smaller bands of the bebop era. Throughout the 1950s Latin dance music, such as mambo, rumba and chachachá, was mainstream popular music in the United States and Europe. The '50s also saw a decline in popularity for mambo big bands, followed by the Cuban Revolution of 1959, which greatly inhibited contact between New York and Cuba. The result was a scene more dominated by Puerto Ricans than Cubans.

The Latin music scene of early 1960s New York was dominated by bands led by musicians such as Ray Barretto and Eddie Palmieri, whose style was influenced by imported Cuban fads such as pachanga and charanga; after the Cuban Missile Crisis of 1962, however, Cuban-American contact declined precipitously, and Puerto Ricans became a larger part of the New York Latin music scene. During this time a hybrid Nuyorican cultural identity emerged, primarily Puerto Rican but influenced by many Latin cultures as well as the close contact with African Americans.

The growth of modern salsa, however, is said to have begun in the streets of New York in the late 1960s. By this time Latin pop was no longer a major force in American music, having lost ground to doo wop, R&B and rock and roll; there were a few youth fads for Latin dances, such as the soul and mambo fusion boogaloo, but Latin music ceased to be a major part of American popular music. Few Latin record labels had any significant distribution, the two exceptions being Tico and Alegre. Though East Harlem had long been a center for Latin music in New York, during the 1960s many of the venues there shut down, and Brooklyn Heights' Saint George Hotel became "salsa's first stronghold". Performers there included Joe Bataan and the Lebron Brothers.

The late 1960s also saw white youth joining a counterculture heavily associated with political activism, while black youth formed radical organizations like the Black Panthers. Inspired by these movements, Latinos in New York formed the Young Lords, rejected assimilation and "made the barrio a cauldron of militant assertiveness and artistic creativity". The musical aspect of this social change was based on the Cuban son, which had long been the favored musical form for urbanites in both Puerto Rico and New York. By the early 1970s, salsa's center moved to Manhattan and the Cheetah, where promoter Ralph Mercado introduced many future stars to an ever-growing and diverse crowd of Latino audiences.

The Manhattan-based recording company, Fania Records, introduced many of the first-generation salsa singers and musicians to the world. Founded by Dominican flautist and band-leader Johnny Pacheco and impresario Jerry Masucci, Fania's illustrious career began with Willie Colón and Héctor Lavoe's El Malo in 1967. This was followed by a series of updated son montuno and plena tunes that evolved into modern salsa by 1973. Pacheco put together a team that included percussionist Louie Ramirez, bassist Bobby Valentin and arranger Larry Harlow. The Fania team released a string of successful singles, mostly son and plena, performing live after forming the Fania All Stars in 1971; just two years later, the All Stars sold out Yankee Stadium. One of their 1971 performances at the Cheetah nightclub, was a historic concert that drew several thousand people and helped to spark a salsa boom.

Salsa quickly spread outside of New York City, to Miami, Cuba, Puerto Rico and Colombia. The city of Cali, Colombia became that country's major center for salsa in the late 1960s, when salsa became a major part of the local Feria de la Caña de Azucar. Salsa also established itself in Quayaquil, Caracas and Panama City.

1970s

From New York salsa quickly expanded to Cuba, Puerto Rico, the Dominican Republic, Colombia, Mexico, Venezuela, and other Latin countries, while the new style became a symbol of "pride and cultural identity" for Latinos, especially Puerto Ricans. The number of salsa bands, both in New York and elsewhere, increased dramatically in the 70s, as did salsa-oriented radio stations and record labels. Popular performers like Eddie Palmieri and Celia Cruz adapted to the salsa format, joined by more authentically traditional singers like Willie Colon and Ruben Blades.Colón and Blades worked together for much of the 1970s and '80s, becoming some of the most critically and popularly acclaimed salsa performers in the world. Their lyricism set them apart from others; Blades became a "mouthpiece for oppressed Latin America", while Colón composed "potent", "socio-political vignettes". Their 1978 album Siembra was, at that time, the best-selling Latin album in history.

The 1970s saw a number of musical innovations among salsa musicians. The bandleader Willie Colón introduced the cuatro, a rural Puerto Rican guitar, as well as jazz, rock, and Panamanian and Brazilian music. Larry Harlow, the arranger for Fania Records, modernized salsa by adding an electric piano. By the end of the decade, Fania Records' longtime leadership of salsa was weakened by the arrival of the labels TH-Rodven and RMM. Salsa had come to be perceived as "contaminated by fusion and disco", and took elements from disaptare styles like go go, while many young Latinos turned to hip hop, techno or other styles. Salsa began spreading throughout Latin America in the 1970s, especially to Colombia, where a new generation of performers began to combine salsa with elements of cumbia and vallenato; this fusion tradition can be traced back to the 1960s work of Peregoya y su Combo Vacano. However, it was Joe Arroyo and La Verdad, his band, that popularized Colombian salsa beginning in the 1980s.

The 1980s was a time of diversification, as popular salsa evolved into sweet and smooth salsa romantica, with lyrics dwelling on love and romance, and its more explicit cousin, salsa erotica. Salsa romantica can be traced back to Noches Calientes, a 1984 album by singer José Alberto with producer Louie Ramirez. A wave of romantica singers, mostly Puerto Rican, found wide audiences with a new style characterized by romantic lyrics, an emphasis on the melody over rhythm, and use of percussion breaks and chord changes. However, salsa lost popularity among many Latino youth, who were drawn to American rock in large numbers, while the popularization of Dominican merengue further sapped the audience among Latinos in both New York and Puerto Rico. The 1980s also saw salsa expand to Mexico, Argentina, Peru, Europe and Japan, and diversify into many new styles.

In the 1980s some performers experimented with combining elements of salsa with hip hop music, while the producer and pianist Sergio George helped to revive salsa's commercial success. He created a sound based on prominent trombones and rootsy, mambo-inspired style. He worked with the Japanese salsa band Orquesta de la Luz, and developed a studio orchestra that included Victor Manuelle, Celia Cruz, José Alberto, La India, Tito Puente and Marc Anthony. The Colombian singer Joe Arroyo first rose to fame in the 1970s, but became a renowned exponent of Colombian salsa in the 1980s. Arroyo worked for many years with the Colombian arranger Fruko and his band Los Tesos.

In the 1990s Cuban salsa became more prominent, especially a distinct subgenre called timba. Using the complex songo rhythm, bands like NG La Banda and Los Van Van developed timba, along with related styles like songo-salsa, which featured swift Spanish rapping. The use of rapping in popular songo-salsa was innovated by Sergio George, beginning with his work with the trio Dark Latin Groove, who "breathed the fire of songo rhythms and the energy of rap and soul into salsa".

Salsa remained a major part of Colombian music through the 1990s, producing popular bands like Sonora Carruseles, while the singer Carlos Vives created his own style that fuses salsa with vallenato and rock. Vives' popularization of vallenato-salsa led to the accordion-led vallenato style being used by mainstream pop stars like Gloria Estefan. The city of Cali, in Colombia, has come to call itself the "salsa capital of the world", having produced such groups as Orquesta Guayacan and Grupo Niche.

Salsa has registered a steady growth and now dominates the airwaves in many countries in Latin America. In addition, several Latino artists, including Rey Ruiz, Marc Anthony, and most famously, the Cuban-American singer Gloria Estefan, have had success as crossovers, penetrating the Anglo-American pop market with Latin-tinged hits, usually sung in English.

The most recent innovations in the genre include hybrids like merenhouse, salsa-merengue and salsaton, alongside salsa gorda. Since the mid-1990s African artists have also been very active through the super-group Africando, where African and New York musicians mix with leading African singers such as Bambino Diabate, Ricardo Lemvo, Ismael Lo and Salif Keita. Salsa is only one of many Latin genres to have traveled back and influenced West African music.