As the 1985 election approached, the Liberal Party interpreted election law as permitting multiple presidential candidates from one party. The Liberal Party claimed victory when its presidential candidates, who received 42% of the vote, collectively outpolled the National Party candidate, Rafael Leonardo Callejas. Jose Azcona Hoyo, the candidate receiving the most votes among the Liberals, assumed the presidency in 1986. With the endorsement of the Honduran military, the Azcona administration ushered in the first peaceful transfer of power between civilian presidents in more than 30 years.

Four years later, Nationalist Rafael Callejas won the presidential election, taking office in 1990. The nation's fiscal deficit ballooned during Callejas' last year in office. Growing public dissatisfaction with the rising cost of living and with widespread government corruption led voters in 1993 to elect Liberal Party candidate Carlos Roberto Reina with 56% of the vote. President Reina, elected on a platform calling for a "moral revolution," actively prosecuted corruption and pursued those responsible for human rights abuses in the 1980s. He created a modern attorney general's office and an investigative police force, increased civilian control over the armed forces, transferred the police from military to civilian authority, and restored national fiscal health.

After winning the 1997 election by a 10% margin, Liberal Carlos Roberto Flores Facusse took office in 1998. Flores inaugurated programs of reform and modernization of the Honduran government and economy, with emphasis on helping Honduras' poorest citizens while maintaining the country's fiscal health and improving international competitiveness. In October 1998, Hurricane Mitch devastated Honduras, leaving more than 5,000 people dead and 1.5 million displaced. Damages totaled nearly $3 billion. President Flores and his administration successfully managed more than $600 million in international assistance. President Flores also moved judicial and penal reforms forward, establishing an anticorruption commission, and supporting passage of a new penal code based on the oral accusatorial system and a law that created an independent Supreme Court. Flores also established a civilian Minister of Defense.

Ricardo Maduro Joest of the National Party won the 2001 presidential elections by 8 percent, and was inaugurated in 2002. During his campaign, President Maduro promised to reduce crime, reinvigorate the economy, and fight corruption. Maduroís first act as President was to deploy a joint police-military force to the streets to permit wider neighborhood patrols in the ongoing fight against the countryís massive crime and gang problem. Maduro was a strong supporter of the global war on terrorism and joined the U.S.-led coalition in Iraq with an 11-month contribution of 370 troops. Under President Maduroís guidance, Honduras also negotiated and ratified the U.S.-Central America Free Trade Agreement (CAFTA), received debt relief, became the first Latin American country to sign a Millennium Challenge Account compact with the U.S., and actively promoted greater Central American integration.

Jose Manuel "Mel" Zelaya Rosales of the Liberal Party won the November 27, 2005 presidential elections by under 4 percentóthe smallest margin ever. Zelayaís campaign theme was "citizen power," and he has vowed to increase transparency and combat narcotrafficking, while maintaining macroeconomic stability. The Liberal Party won 62 of the 128 congressional seats, just short of an absolute majority. Zelaya was inaugurated on January 27, 2006.