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First settlements by Spanish conquerors date back to around 1690. The town was founded in 1780 as Nueva Reducción de Segovia.

The name Ocotal first appears in written historic records in 1847. In the 1920’s the town was a stronghold of the armies of Augusto César Sandino, and on July 16th, 1927, during the battle of Ocotal, it was bombed from the air by the U.S. Marine Corps.

The city is situated 600 metres above sea level near the mouth of the river Dipilto, and is surrounded by majestic mountains and expanses of rain forest. It has about 33,000 inhabitants and is located 225 kilometres from the capital of Managua.

The climate in Ocotal is sub-tropical, relatively dry, and temperatures are between 18 and 30 degree Celsius year-round. The rainy season lasts from June to October.

Ocotal is the trade and administrative centre of the Département Nueva Segovia.