Reggaeton music originated in Panama during the 1970's. El General, a well known Panamanian artist of the 1970's is credited to have developed this unique sound of the music by singing Spanish lyrics over a fast Reggae beat. This is a genre of music most popular among the youth, and back then was simply known as "Spanish Reggae." There is a large population of Jamaican immigrants in Panama who moved there to work building the canal. They brought with them Reggae music and fused it with the local popular Latin music. The music became popular in the 1990's in Latin America, and rapidly spread to North America and Europe.

The typical instruments used in Reggaeton music include synthesized sounds from a synth guitar, keyboard, bass, and drum machine. Live performances are invariably played with live instruments such as bass guitar, drums, keyboard, and synthesized sound used where necessary.

The term Reggaeton is also a term to describe any Latin music that is fused with Reggae music. Reggaeton music is predominantly influenced by Reggae's subgenre, Dancehall, and infused in various traditional Latin American musical genres such as Salsa, Bomba, Merengue, and Bachata, creating a sweeping movement, also known as "Spanish Reggae."

Throughout the explosion in the 1990's, Reggaeton gained tremendous popularity with Latino youth in Panama and all throughout Latin America, but especially Puerto Rico, the Dominican Republic, Cuba, Columbia, Venezuela, Costa Rica, Honduras, and Mexico.

Reggaeton lyrics are versatile, and the varied themes range from dancing, love, to sex. Although most Reggaeton music artists are singers, the vocalists often blend rapping and singing in their lyrics. Popular Reggaeton songs are very animated, and rhythmic, mainly targeting a younger fan base. In Panama the genre is heavily influenced by the Reggae sound due to the Jamaican migration to the region.

In Puerto Rico, when the music took on the moniker of Reggaeton, the music took another direction. Young artists of the 1980's and 1990's were inspired by Salsa, Hip-hop, and R&B created an underground version of Spanish Reggae " The lyrics still dealt with dancing, love, and sex, but also addressed social issues such as violence, poverty, drugs. The street artists used "marquesinas" (open garage), housing complexes, and the project of Puerto Rico to record, distribute and promote their songs via cassettes.

These less than pristine recording conditions did not impede the quality of the music production nor the expansion and the popularity of Reggaeton. When the most popular recordings of the underground movement were launched in the 1990's, the cassettes had reached the music stores, and Reggaeton gained full acceptance from the youth of all classes of Puerto Rican society. Reggaeton was no longer "underground" or taboo and became an important element in the Puerto Rican Culture. In the United States, prominent artists such as Tego Calderun and Daddy Yankee popularized Reggaeton. In early 2000's, XM radio station launched channel playing Reggaeton music exclusively.

Latin America has seen the evolution of various genres of music in the 20th century. Reggaeton music is known to be one of the most versatile. From the Spanish Reggae of Panama, the heavy influence of Jamaican Dancehall, the underground Reggaeton of Puerto Rico, and the Reggae-rap of New York, Reggaeton has been a dominant artistic vehicle for youths of Latin America, New York, and Latin immigrants living in Europe. Today, the music influenced by modern-day beats, continues to flourish and enjoys worldwide exposure.