Granada, city, southwestern Nicaragua, capital of Granada Department, on the northwestern shore of Lake Nicaragua. It is the chief port on the lake and one of the nation's leading commercial, transportation, and manufacturing centers. Products include chemicals, textiles, and processed food. Nearby are Mombacho volcano and a group of scenic islands in the lake, the largest of which is Zapatera. These support a growing tourist industry.
Granada was founded by the Spanish in 1523 and retains many ornate churches and old Spanish-style buildings from the colonial period. As the headquarters of the Conservative Party in the 19th century, it was a bitter rival of León, the center of the Liberal Party. Despite being captured and badly damaged by the American adventurer William Walker in the mid-1850s, Granada was the nation's main city until the rise of Managua in the 1890s. Population (1995 estimate) 70,000.
