Morgan's fleet sailed from the Bay of Bocas del Toro to El Puerto del Ponton, four miles from Porto Bello, where the men transferred into 23 canoes. Fortune intervened almost immediately: six emaciated English prisoners who had escaped from Spanish captivity appeared and offered to guide them. Paddling through the darkness, the privateers reached a blockhouse at La Rancheria, an old pearling station guarded by five men. Morgan's men asked for surrender and received musket fire instead. They stormed the blockhouse and killed the defenders, but the shots had been heard in the city. Surprise was lost. As dawn broke, Morgan had to rush his men two miles across open beach toward Santiago Castle. When he saw the height of the walls, he hesitated -- then split his force. One group charged into the town to sow chaos. The other circled to higher ground behind the castle. The Spanish garrison had loaded their cannons with round shot instead of grapeshot, a miscalculation that let Morgan's men sprint beneath the arc of fire and press against the base of the walls.

Santiago Castle still held, and Morgan devised a stratagem that would haunt his reputation for centuries. He ordered ladders built and then marched captured civilians -- the town's mayor, friars, nuns, the elderly, and the sick -- toward the castle as human shields. The privateers crouched behind the prisoners, who pleaded with the garrison not to fire. The castle's gunners opened fire anyway, chain shot wounding several prisoners and one Englishman. In the confusion, the attackers reached the walls. One group hacked through the main gate with axes while another scaled the ramparts with ladders. An Englishman raised a red flag -- the signal for no quarter. Seventy-four Spanish defenders died, including the commander. Morgan lost roughly an eighth of his attacking force. Across the harbor, the unfinished Fort San Geronimo fell quickly. The last holdout, San Felipe Castle, was defended by fifty men under Castellan Alejandro Manuel Pau y Rocaberti. When surrender became inevitable, Rocaberti negotiated terms, then drank a vial of poison before stepping outside.

With all three forts taken, Morgan's privateers stripped Porto Bello of its wealth. Torture was used on residents to reveal hidden caches of money and jewels, though no firsthand witnesses confirmed the claims of widespread rape that later appeared in Exquemelin's biography. Morgan sent two messengers to Panama City demanding 350,000 pesos or the town would burn. Governor Don Agustin de Bracamonte responded by marching 800 soldiers through the jungle to retake the city. Morgan, tipped off by local indigenous people who had no love for Spain, positioned 200 men in a narrow pass along the only passable road. The ambush devastated Bracamonte's vanguard, and subsequent attacks on Morgan's prepared defenses all failed. Disease, dwindling supplies, and rumors of French reinforcements arriving to support the English broke Bracamonte's resolve. After a week of negotiations, the two sides agreed on 100,000 pesos.

On August 1, 1668, mules carried the ransom into Porto Bello: 27 silver ingots plus gold and silver coins totaling 100,000 pesos. Combined with loot already taken -- silk, linens, cloth, weapons, 57 brass cannons stripped from the forts, and enslaved people seized from the town -- the total haul amounted to roughly 250,000 pesos, somewhere between 70,000 and 100,000 pounds sterling. The figure exceeded Jamaica's entire annual agricultural output and approached half of Barbados's sugar exports. Each privateer received approximately 120 pounds, five to six times a sailor's annual wages. Morgan kept his promise to leave the city intact and sailed on August 2, reaching Jamaica by mid-month to a hero's welcome. Spain was furious. Diplomats in Madrid bombarded their English counterparts with demands for redress. Governor Modyford reported to London that he had "reproved" Morgan, but neither man faced any real consequences. Morgan's Porto Bello raid cemented his legend -- and two years later, he would cross the entire isthmus to sack Panama City itself.