Rio Rico, a dusty village on the Texas–Mexico border just 50 miles from the Gulf of Mexico might seem like an odd flashpoint for an international incident. But in 1906, an American irrigation company, afraid that flooding might cut off access to one of its pumping plants, dug a new channel for the Rio Grande, cutting off a switchback in the river’s course. This moved 413 acres of American territory south of the river, and set off a series of border disputes that lasted almost 80 years.

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If the American Rio Grande Land & Irrigation Co. had just spent $200 on boundary markers, there would have been no confusion. Instead, everyone assumed that this 413-acre tract of land was part of Mexico, even though international law specifies that man-made changes to watercourses shouldn’t move borders. The town of Rio Rico grew up there in the 1920s—a Mexican town that was, unbeknownst to its residents, on U.S. soil!

Rio Rico became a border boom town, home to all kinds of craziness and vice. Local legend holds that even Al Capone used to party there. But in 1967, an Arizona State researcher discovered that the land was actually part of the United States—the only American soil south of the Rio Grande.

Lots of legal wrangling ensued, and finally an appeals court granted U.S. citizenship to the Mexicans who had settled the area. Most immediately left the now-sleepy town for more hospitable parts of their new homeland, and the United States handed over the land to Mexico in 1977. To this day, Rio Rico is the last piece of U.S. soil ever ceded to a foreign power.

For many years, thousands of Mexican visitors streamed through Rio Rico, hoping local authorities would issue proof that they were born nearby so they could emigrate to the United States. Most left disappointed. Today, Rio Rico is virtually a ghost town, with no one left but those too old to be physically able to move north, or those too young to be legally able.

Explore the world's oddities every week on CondeNastTraveler.com with Ken Jennings. Check out his latest book, Maphead.