After the War of the Pacific, an extraordinary effort of rebuilding began. The government started to initiate a number of social and economic reforms in order to recover from the damage of the war. Political stability was achieved only in the early 1900s.
In 1894, Nicolás de Piérola, after allying his party with the Civil Party of Peru to organize guerrillas with fighters to occupy Lima, ousted Andrés Avelino Cáceres and once again became president of Peru in 1895. After a brief period in which the military once again controlled the country, civilian rule was permanently established with Pierola's election in 1895. His second term was successfully completed in 1899 and was marked by his reconstruction of a devastated Peru by initiating fiscal, military, religious, and civil reforms. Until the 1920s, this period was called the "Aristocratic Republic", since most of the presidents that ruled the country were from the social elite.
During Augusto B. Leguía's periods in government (1908–1912 and 1919–1930, the latter known as the "Oncenio" (the "Eleventh"), the entrance of American capital became general and the bourgeoisie was favored. This policy, along with increased dependence on foreign investment, focused opposition from the most progressive sectors of Peruvian society against the landowner oligarchy.
In 1929, Peru and Chile signed a final peace treaty, the Treaty of Lima by which Tacna returned to Peru and Peru yielded permanently the formerly rich provinces of Arica and Tarapacá, but kept certain rights to the port activities in Arica and decisions of what Chile can do on those territories.

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