Decree 900 did not emerge from a vacuum. In 1944, a revolution had toppled Guatemala's last military dictator and ushered in what Guatemalans call the Ten Years of Spring — a decade of democratic reform and cautious optimism. A new constitution in 1945 explicitly called for the protection of communal land and equitable distribution of wealth. Juan Jose Arevalo, the first democratically elected president of this new era, laid the groundwork. When Arbenz succeeded him in 1951, he inherited a country with a high GDP but staggering inequality, and a vision for transforming Guatemala from a feudal economy into a capitalist one. He pushed for a national highway, a new port, and a hydroelectric power plant. But the centerpiece was land reform — the idea that Guatemala's unused acres should feed Guatemalan families rather than sit as tax-sheltered assets on the books of absentee landlords.

Decree 900 was more bureaucratic than revolutionary. It did not seize land outright. Instead, it created a National Agrarian Department and required landless families to petition Local Agrarian Committees — known as CALs — which evaluated claims and decided how to redistribute unused portions of large estates. Landowners could appeal decisions all the way up to the president. Compensation came in the form of government bonds maturing in 25 years, valued at whatever the landowner had declared the property worth on the previous year's tax returns. This mechanism had a sharp edge: landowners who had been undervaluing their holdings for tax purposes now found their compensation pegged to their own dishonesty. By 1954, roughly 100,000 families — about 500,000 people, one-sixth of the national population — had received land, along with bank credit and technical assistance. A National Agrarian Bank dispensed over $3.3 million in loans during 1953, of which an extraordinary 90 percent was repaid by July 1954.

The United Fruit Company owned approximately 550,000 acres in Guatemala — 42 percent of the nation's arable land — and cultivated only a fraction of it. When the Agrarian Reform Law targeted those uncultivated holdings, the company was compensated $627,572 in bonds, the amount it had declared the land worth for tax purposes. United Fruit claimed the land was actually worth $15,854,849 and lobbied Washington aggressively, framing Arbenz as a communist threat. The framing found willing ears. Secretary of State John Foster Dulles and CIA Director Allen Dulles both had ties to United Fruit's legal counsel. After a failed attempt called Operation PBFortune, the CIA launched Operation PBSuccess in 1953, cultivating relationships with disaffected Guatemalan military officers, imposing an arms blockade, and running propaganda campaigns designed to convince Guatemalans that Arbenz's government was collapsing. In June 1954, a small invasion force led by exiled Colonel Carlos Castillo Armas crossed into Guatemala, backed by CIA airstrikes and a U.S. Navy blockade. Armas's ground forces were quickly defeated, but the psychological warfare succeeded. Arbenz resigned, and Armas took power.

Castillo Armas repealed Decree 900 within weeks and reversed 95 percent of the redistribution. Government documents related to the law were destroyed. Labor unions were abolished, their members branded as communists. The 500,000 people who had received land lost it. The CALs — more than 3,000 local committees that had represented the first meaningful exercise of political power by ordinary Guatemalans — were dissolved. What followed was not stability but decades of civil war, as indigenous and poor Guatemalans fought against landowners and the military in a conflict that killed an estimated 200,000 people and did not end until the peace accords of 1996. Those accords explicitly repudiated Armas's policies and called for a return to the idea of land as a social good. Decree 900 lasted only eighteen months, but its ghost — the question of who owns the land and who works it — has haunted Guatemala ever since.