Francisco Vasquez de Coronado assembled an enormous expedition at Compostela in 1540–1542 to explore and find the mystical Seven Golden Cities of Cibola as described by Cabeza de Vaca who had just arrived from his eight-year ordeal traveling from Florida to Mexico. Coronado's men found several mud baked pueblos in 1541, but found no rich cities of gold. Further widespread expeditions found no fabulous cities anywhere in the Southwest or Great Plains. A dispirited and now poor Coronado and his men began their journey back to Mexico leaving New Mexico behind.

As a part of New Spain, the claims for the province of New Mexico passed to independent Mexico following the 1810-1821 Mexican War of Independence. During the brief 26 year period of nominal Mexican control, Mexican authority and investment in New Mexico were weak, as their often conflicted government had little time or interest in a New Mexico that had been poor since the Spanish settlements started. Some Mexican officials, saying they were wary of encroachments by the growing United States, and wanting to reward themselves and their friends, began issuing enormous land grants (usually free) to groups of Mexican families as an incentive to populate the province.

Small trapping parties from the United States had previously reached and stayed in Santa Fe, but the Spanish authorities officially forbade them to trade. Trader William Becknell returned to the United States in November 1821 with news that independent Mexico now welcomed trade through Santa Fe.

Following the Mexican-American War and the Treaty of Guadalupe Hidalgo, Mexico ceded its mostly unsettled northern holdings, today known as the American Southwest and California to the United States of America in exchange for an end to hostilities, the evacuation of Mexico City and many other areas under American control. Mexico also received $15 million cash, plus the assumption of slightly more than $3 million in outstanding Mexican debts.

The Congressional Compromise of 1850 halted a bid for statehood under a proposed antislavery constitution. Texas transferred eastern New Mexico to the federal government, settling a lengthy boundary dispute. Under the compromise, the American government established the New Mexico Territory on September 9, 1850. The territory, which included all of Arizona, New Mexico, and parts of Colorado, officially established its capital at Santa Fe in 1851.

The United States acquired the southwestern boot heel of the state and southern Arizona below the Gila river in the mostly desert Gadsden Purchase of 1853. This purchase was desired when it was found that a much easier route for a proposed transcontinental railroad was located slightly south of the Gila river. The Southern Pacific built the second transcontinental railroad though this purchased land in 1881.

During the American Civil War, Confederate troops from Texas briefly occupied southern New Mexico. Union troops re-captured the territory in early 1862. Arizona was split off as a separate territory in 1863.

The United States government built the Los Alamos Research Center in 1943 amid the Second World War. Top-secret personnel there developed the atomic bomb, first detonated at Trinity site in the desert on the White Sands Proving Grounds between Socorro and Alamogordo on July 16, 1945.

Albuquerque expanded rapidly after the war. High-altitude experiments near Roswell in 1947 reputedly led to persistent but unproven suspicions that the government captured and concealed extraterrestrial corpses and equipment. The state quickly emerged as a leader in nuclear, solar, and geothermal energy research and development. The Sandia National Laboratories, founded in 1949, carried out nuclear research and special weapons development at Kirtland Air Force Base south of Albuquerque and at Livermore, California.

Located in the remote Chihuahuan Desert the Waste Isolation Pilot Plant (WIPP) is located 26 miles southeast of Carlsbad. Here nuclear wastes are buried deep in carved out salt formation disposal rooms mined 2,150 feet underground in a 2,000-foot thick salt formation that has been stable for more than 200 million years. WIPP began operations on March 26, 1999.

The landscape ranges from wide, rose-colored deserts to broken mesas to high, snow-capped peaks. Despite New Mexico's arid image, heavily forested mountain wildernesses cover a significant portion of the state. Part of the Rocky Mountains, the broken, north-south oriented Sangre de Cristo (Blood of Christ) range flanks both sides of the Rio Grande from the rugged, pastoral north through the center of the state.

Cacti, yuccas, creosote bush, sagebrush, and desert grasses cover the broad, semiarid plains that cover the southern portion of the state. The Federal government protects millions of acres of New Mexico as national forests. Other protected lands include the following national monuments:

Visitors also frequent the surviving native pueblos of New Mexico. Tourists visiting these sites bring significant monies to the state. Other areas of geographical and scenic interest include Kasha-Katuwe Tent Rocks National Monument and the Valles Caldera National Preserve. The Gila Wilderness lies in the southwest of the state.

Other Constitutional officers, all of whose terms also expire in January 2007, include Secretary of State Rebecca Vigil-Giron, Attorney General Patricia A. Madrid, State Auditor Domingo Martinez, State Land Commissioner Pat Lyons, and State Treasurer Douglas Brown. Vigil-Giron, Madrid and Martinez are Democrats. Lyons is a Republican and Brown is a Republican serving as interim State Treasurer following the indictment and resignation of his predecessor, Democrat Robert Vigil.

A state House of Representatives with 70 members and a state Senate with 42 members comprise the state legislature. The Democratic Party generally dominates state politics, and as of 2004 50% of voters were registered Democrats, 33% were registered Republicans, and 17% did not affiliate with either of the two major parties.New Mexico sent Democrat Jeff Bingaman to the United States Senate until January 2007 and Republican Pete V. Domenici until January 2009. Republicans Steve Pearce and Heather Wilson and Democrat Tom Udall represent the state in the United States House of Representatives.

The Carlsbad and Fort Sumner reclamation projects on the Pecos River and the nearby Tucumcari project provide adequate water for limited irrigation in those areas of the desert and semiarid portions of the state where scant rainfall evaporates rapidly, generally leaving insufficient water supplies for large-scale irrigation.. Located upstream of Las Cruces, the Elephant Butte Reservoir provides a major irrigation source for the extensive farming along the Rio Grande. Other irrigation projects use the Colorado River basin and the San Juan River.

Lumber mills in Albuquerque process pinewood, the chief commercial wood of the rich timber economy of northern New Mexico. New Mexicans derive much of their income from mineral extraction. Even before European exploration, Native Americans mined turquoise for making jewelry. After the Spanish introduced refined silver alloys they were incorporated into the Indian jewelry designs. New Mexico produces uranium ore, manganese ore, potash, salt, perlite, copper ore, beryllium, and tin concentrates. Natural gas, petroleum, and coal are also found in smaller quantities.

Industrial output, centered around Albuquerque, includes electric equipment; petroleum and coal products; food processing; printing and publishing; and stone, glass, and clay products. Defense-related industries include ordnance. Important high-technology industries include lasers, data processing, and solar energy. Federal government spending is a major driver of the New Mexico economy. The federal government spends 2 dollars on New Mexico for every dollar of tax revenue collected from the state. This rate of return is higher than any other state in the Union. The federal government also a major employer in New Mexico providing more than a quarter of the state's jobs. Many of the federal jobs relate to the military; the state hosts three air force bases (Kirtland Air Force Base, Holloman Air Force Base, and Cannon Air Force Base); a testing range (White Sands Missile Range); an army proving ground and maneuver range (Fort Bliss Military Reservation - McGregor Range);national observatories; and the technology labs of Los Alamos National Laboratory (LANL) and Sandia National Laboratories (SNL). SNL conducts electronic and industrial research next to Kirtland AFB, on the southeast side of Albuquerque. These installations also include the missile and spacecraft proving grounds at White Sands. In addition to the military employers, other federal agencies such as the National Park Service, the United States Forest Service, and the United States Bureau of Land Management are a big part of the states rural employment base.

Virgin Galactic, the first company to develop commercial flights into space, has decided to put its world headquarters and mission control in southern New Mexico (25 miles or 40 km south of Truth or Consequences). Tourism provides many service jobs.