The Hughes-Peynado Agreement was a pivotal moment in U.S.-Dominican relations as it formally ended the United States' military occupation of the Dominican Republic, which had begun in 1916 amidst political unrest and instability. U.S. interests in the region were primarily motivated by a desire to prevent any European influence and to protect American investments. Over the years, the occupation faced considerable opposition from the Dominican populace, leading to growing tensions and resistance against American governance.

In June 1922, Charles Evans Hughes and Francisco J. Peynado came together in Washington D.C. to sign an agreement that outlined the conditions for ending the U.S. presence. The agreement emphasized that the United States would withdraw military forces, while also creating a framework for supporting the Dominican government as it navigated its path to self-governance. The deal included provisions for financial oversight and protection of American economic interests, which reflected broader U.S. policies in Latin America during the early 20th century.

The transition was significant, as it opened the door for the Dominican Republic to regain control over its internal affairs. However, the agreement also established a precedent for future U.S. interventions under the guise of protection and stability, significantly shaping American foreign policy in the Caribbean and Central American regions. The agreement demonstrated the complexities of U.S. imperialism and the ways it sought to balance intervention with the notion of sovereignty.