The failure of the Spanish authorities to clearly delineate the southern boundary of Yucatán subsequently allowed buccaneers or pirates (primarily British) preying on the Spanish treasure fleets to find refuge along the coast of Belize. When Spain attempted to take action on various occasions to expel the British there was confusion over which Spanish captain-general maintained jurisdiction in the area. Consequently the pirates were able to flee before the Spanish arrived and could return in the absence of any permanent Spanish outposts.

Treasure wasn't always easy to come by and sometimes pirates would plunder piles of logwood which had been cut and were awaiting shipment to Europe. Worth £90-110 a ton, the hard and extremely heavy wood was used in the expanding British textile industry to dye woollens black, red and grey. The various treaties signed between Britain and Spain from the late seventeenth to mid-eighteenth centuries, initially designed to outlaw the buccaneers, eventually allowed the British to establish logwood camps along the rivers in northern Belize, though they were never intended to permit permanent British settlement of a territory which Spain clearly regarded as falling within its imperial domain. Thus the British settlements in Belize and the Bay of Honduras periodically came under attack whenever Spain sought to defend its interests. But the attention of the European powers rarely rested upon the humid, insect-ridden swamps where the logwood cutters, who became known as Baymen , worked and lived. The British government, while wishing to profit from the trade in logwood, preferred to avoid the question of whether or not the Baymen were British subjects, and for the most part they were left to their own devices.

Spanish attacks on the settlements in Belize occurred throughout the eighteenth century, with the Baymen being driven out on several occasions. Increasingly, though, Britain began to admit a measure of responsibility for the protection of the settlers and occasionally sent troops to aid the Baymen. Decades of Spanish attacks had fostered in the settlers a spirit of defiance and self-reliance, along with the belief that British rule was preferable to Spanish.

The final showdown between the waning Spanish Empire and the Bay settlers (supported this time by a British warship and troops), the Battle of St George's Caye , came as a result of the outbreak of war between Britain and Spain in 1796. The Governor of Yucatán assembled ships and troops, determined to drive out the British settlers and occupy Belize. But this time the Baymen had time to prepare and voted (by a small margin) to stay and fight. Lieutenant-Colonel Barrow was despatched to Belize as Superintendent, to command the settlers in the event of hostilities, and the Baymen, now under martial law, prepared for war, albeit grudgingly. A few companies of troops were sent from Jamaica and slaves were released from woodcutting to be armed and trained. The sloop HMS Merlin was stationed in the bay, local vessels were armed and gun rafts built in preparation for the attack, which was expected at any time.

The Spanish fleet , comprising sixteen heavily armed men-of-war and 12,000 troops, arrived just north of St George's Caye in early September 1798, making several attempts to capture the caye and force a passage to Belize. Each time they were beaten back by the Baymen with their small but highly manoeuvrable fleet, with the Baymen's slaves at least as eager to fight the Spanish as their masters were. During the final attack, on the morning of September 10 , the Spanish fleet, already weakened by desertions and yellow fever, suffered heavy losses before sailing for Yucatán.