For decades, Hispanics have existed mainly in the shadows of the American dream. Now they're taking to the streets in their millions, in the biggest march for equality since the Civil Rights movement. And with $1 trillion to spend, millions ready to vote and their own candidate for President, Hispanics hold the key to the new American century. Paul Harris reports

Eddie 'El Piolin' Sotelo does not look like a revolutionary threat to America. He is short, stocky, with neat dark hair and a broad smile. His nickname means simply 'Tweety Bird' in Spanish. Until 18 months ago, Sotelo was virtually unknown. Though more than a million listeners tuned into his radio show, the majority of America was blissfully unaware of his championing of the rights of illegal immigrants - simply because he did it in Spanish. Then, one day, he publicised protests against a draft law to classify undocumented migrants as felons. Sotelo urged his Hispanic listeners to take to the streets. They answered his call in their millions. In Los Angeles, 400,000 marchers streamed through downtown. A similar number jammed Chicago. In dozens of cities, millions of people were suddenly protesting against a law few other Americans even knew about. And 'El Piolin' was at the front of the marchers. 'More than two million marched. And I am proud that we were peaceful,' he tells The Observer

The demonstrators left a stunned America asking one question: who are these people? The answer, it seems, is simple: they are America's future. The US is currently in the grip of a demographic change the like of which has not been seen since the 19th century. A mass immigration is taking place that dwarfs the flow of Irish, Germans, Jews and Italians that, 100 years ago, saw America rise to a superpower. It is a movement of Hispanic immigrants - legal and illegal - and the explosive growth of their descendants.

In 1950 there were just 4m Spanish-speaking Americans, and the word Hispanic had not even been coined. Now their number stands at 44m, and they have surpassed blacks as the country's largest minority. By 2050 there will be 103m Hispanics - or a quarter of all Americans.

That change has had a huge impact on what it means to be American. From politics to the economy, sport and the arts, the US is changing. Spanish is becoming the nation's second language. A Hispanic, Bill Richardson, is running for President. Their spending power is nearly $1 trillion, which, if Hispanic America were a separate country, would give it the ninth largest economy on earth. 'What is happening now is one of the most important moments in American history,' says Professor Ruben Rumbaut, a sociologist at the University of California. This is a second American revolution.

Every immigrant has a story. Rodolfo Acevedo left Argentina in 1990 for the same reason most other migrants come to America: opportunity. 'Argentina had just gone through hyperinflation. It was a chance to get a better life,' he says.

Acevedo wanted to be an architect, but on arrival in Boca Raton, Florida, the only job he could get was at a restaurant. But as the diner was popular with architects, Acevedo brought in his drawings. Eventually he got an entry-level job and by 2002 was a partner. Last August he took up American citizenship. Acevedo's voice trembles as he recalls the ceremony: 'It was unreal. The culmination of a dream.'

Acevedo took a legal route, following a relative already living in the US. Such kinship networks stretch out from every city in America down through Mexico and Latin America to the Spanish-speaking Caribbean. Many follow Acevedo's path of taking any job and working their way up. They see America as classless, a place where hard work brings just rewards. 'In Argentina it was about who you were and where you came from. In America that is less true,' Acevedo says.

But there is another side of the Hispanic wave - the illegal immigrants, who likely measure some 12m or so. These are the 'wetbacks' who cross the border with Mexico, risking their lives. These are the people whose bodies are found in the desert and who are at the bottom of America's low-wage economy: working the nation's kitchens and harvesting its crops. They harbour the same dreams as Acevedo and some have similar success. Amazingly, Eddie Sotelo is one of their number. He entered the US illegally on a forged green card. Now he is a famous DJ. No wonder so many answered his call. 'I am one of them,' Sotelo says. 'I am just like my listeners.'

But the Hispanic revolution is not simply a story of migrants. If immigration stopped tomorrow, the massive growth of the Hispanic population would continue apace. Hispanic America is younger than the rest of America and it has more children. The average non-Hispanic family has 1.8 children; for Hispanics it is 2.8. Some 15 per cent of non-Hispanics are over 65, but the figure for Hispanics is just 5 per cent. 'Stopping immigration would not change a thing. Most of them are born here,' says Nestor Rodriguez, a professor at the University of Houston.

Hispanics are firmly entrenched in everyday American life. You can see that reality on the streets of New York, in areas that have always played host to the latest wave of hopeful immigrants. The South Bronx has been home to Irish, Jews and Italians. Now it is Hispanic. On a walk down Third Avenue, the streets are full of Hispanic life. The shops sell Latin American food; a family sits on the pavement playing loud Spanish rap; a van drives by with a Dominican flag flying from its windows. It is in this hardscrabble place that Jorge Medina was born. And when he grew up and became a success, he built a factory here. Hailing from a poor Puerto Rican family, Medina's identity as both Puerto Rican and American sits easily with him. His firm, which he started in his Bronx apartment, now has sales of more than $1m. It supplies sporting equipment to some of the most famous names in baseball, such as Carlos Beltran, who reflect the dominance Hispanic players now have in America's national game. 'I am proud to be American. I am proud to be of Puerto Rican descent,' Medina says. 'I don't distinguish between the two.' He stands in front of a rack of baseball bats: the perfect image of Americana. Then he reaches up and plucks a T-shirt from the shelves. He grins as he shows off the logo: 'Viva la revolucion'.

The impact of the Hispanic revolution is being felt across American society. Often, nuances show profound changes. Dial any helpline and you hear the message: 'Press one to continue in English. Oprima el dos para continuar en espanol.' It is there in the national palate: sales of taco chips are growing two-and-a-half times faster than crisps; sales of white bread are declining while tortillas are flying off the shelves. Mexico's independence day festival of Cinco de Mayo is now a national celebration on a par with St Patrick's Day. The traditional coming-of-age celebration for Hispanic women - known as quinceanera - is replacing 'sweet 16' parties. The chain Pizza Patron even accepts Mexican pesos.

Sitting in the rarefied atmosphere of the Conde Nast building in Manhattan, Luzmery Amador shows how far it is possible to come. The daughter of poor, working-class immigrants from Colombia, Amador works as an art director. In a slinky black dress and killer heels, she relaxes in the cafeteria, a New York hotspot where the fashion tastes of the world are decided. 'Who would have thought that I would go to Florence and Paris to see the latest shows?' she says. 'My parents still don't speak any English.'

That is no surprise: in many areas of America it is possible to get by entirely in Spanish. A staggering 28m Americans now speak Spanish at home. (The next largest non-English language is Chinese, with just 2m speakers.) This has created a vibrant Spanish-language market in America. The country's top 500 companies spend more than $5bn on Spanish advertising each year. 'It is a critical mass,' says Cristina Benitez, author of Latinization: How Latino Culture is Transforming the US. Benitez advises large companies such as Kraft and Pepsi how to deal with these changes. But the changes have had a personal impact too. As a child she remembers cringing at her Hispanic name in school. 'I used to have to spell my name for people. Now I don't have to do that,' she says.

Part of the reason why so much Hispanic culture is becoming mainstream is that it largely travels over a land border, not an ocean. This means the most Hispanic parts of the US - California, Texas, Arizona - sit next to the Spanish-speaking world. Cross-border media, business (and crime) all flourish in ways they could not with previous immigrant waves from Europe.

But cities such as New York and Chicago now have huge Hispanic populations too. Indeed, the Hispanic revolution is changing unexpected parts of the country beyond recognition. Take New Orleans. In the wake of Hurricane Katrina, it required a cheap army of labourers to rebuild the city. Enter the Hispanics. Now, in a city once known for its Cajun food and French influences, there are more than 100,000 Hispanics. The first shop to re-open in the ruined Lower Ninth Ward was a 'tienda Latina' selling Hispanic groceries.

Myelita Melton was among the first to notice the change. She sells Spanish language courses and attended the first post-Katrina business conference in the city. She was surprised to notice her taxi driver was a psychiatrist from Nicaragua. Then she realised her hotel maid was Honduran. 'Walking down Bourbon Street I heard so much Spanish. Those people are putting down roots,' she says. She is bombarded with requests for Spanish courses from New Orleans city officials.

But perhaps the most surprising outpost of the Hispanic revolution is the Deep South. The region has been defined by black and white racial conflict, yet now a third group has arrived, and the results have been shocking. The conventional wisdom holds that blacks and Hispanics would likely seek common ground, as both are ethnic minorities. Yet the two groups are clashing over access to healthcare, benefits and school places. 'There are rising tensions. There is a clash of interests, or the perception of one,' says Paula McClain, a professor at Duke University and one of the few academics doing research in the area. Most surprising of all have been surveys showing that southern blacks and whites feel far closer to each other than either does to Hispanics. The Hispanic immigration could transform the South's ancient racial wounds. 'This new population is blurring the racial divide. Black and white southerners feel they know each other and they don't know these other people,' says McClain. But she doesn't see that as a recipe for racial harmony. 'There is a potential for backlash against the Hispanics. It is not going to be a feelgood story.'

It is not just a cultural transformation - a political earthquake is brewing. The explosion of the Hispanic population has huge ramifications for Republicans and Democrats as they face a fundamental truth: whichever party captures the Hispanic vote will capture the White House.

The signs of this growing political power are most obvious in Texas, a state which has already ushered in one political revolution in the shape of President George W Bush and his evangelical Christian backers. Now, a different political wind is blowing through the Lone Star state. Texas will soon be a state in which the majority of people are from a minority, and most will be Hispanic. By 2040, for every white Texan there will be two Hispanics. You can see the changes already in a city like San Antonio. This is the home of the Alamo, where Davy Crockett's army lost a battle to Mexico but triggered a war that eventually saw Texas join America. Now San Antonio, the US's seventh largest city, is 60 per cent Hispanic. Just yards from the Alamo sits the newly-opened Museum of Hispanic America.

But it is not just Texas. The whole south west - the fastest-growing region in America - is turning Hispanic: they make up 28 per cent of Arizona, 25 per cent of Nevada, 20 per cent of Colorado and 43 per cent of New Mexico. That brings political power. Across America there are 5,129 elected Hispanic officials, a rise of 40 per cent in 10 years. One, former New Mexico governor Bill Richardson, is running for president.

The Hispanic community has become a battleground for Democrats and Republicans, and it is a battle the Republicans are beginning to lose. The reason is simple: immigration. In 2000, the Republicans and Democrats almost split the Hispanic vote. But as a national backlash against illegal immigration has swept white America, the Republican party has been carried along by its grass roots. Earlier this year Bush attempted to pass an immigration law that would have allowed millions of illegals a path to citizenship. It was destroyed by a Republican rebellion that devastated the party's chances of winning the Hispanic vote. That could turn the future of American politics a deep blue.

It is happening in Texas already. Democrats haven't won a state-wide contest here since 1994, yet the state's Republican governor, Rick Perry, only survived last year because the opposition split between three candidates. In Dallas, a local paper recently heralded a 'Democrat deluge' after the party won an astounding 41 of 42 local judicial elections. Elsewhere, two Republican senators in Arizona were swept out of office after taking an ultra-hard line on immigration, which was popular with Republican whites. Then they found out Hispanics voted too.

America's 44m Hispanics have the potential to wield enormous power, yet 60 per cent of them do not vote: either they are too young or ineligible, or afraid of government. But that is changing. Political activists are out urging the community to go to the polls. And 'El Piolin' has turned his attentions to the cause, using his radio show to emphasise the importance of the vote. That, he believes, is the true cutting edge of the Hispanic revolution, and his listeners hear it every day. Soon the rest of America will hear it too. 'At the next election they are going to find out: we know how to vote,' he laughs.

But for every wave of change there is always a backlash. The fight against the Hispanic revolution is gathering momentum in small towns across America. None is more on the frontline than the seemingly sleepy Illinois village of Carpentersville, one of a string of towns hereabouts that were founded by Irish and Polish immigrants, thrived on trade and factories, and have now hit harder times.

The Fox River cuts through Carpentersville, and is proving a very real division. On the west side the town is mainly white; on the poorer eastern side it is Hispanic. A steady influx has turned a once homogeneous community into one that is 40 per cent Hispanic. The east side is now full of Spanish-speaking hair salons, Mexican markets and day labourers gathering for work.

Now, like scores of other towns across America, Carpentersville has drawn up laws promoting English-only rules and is cracking down on companies that hire illegals and fining landlords who rent rooms to them. The public face of the backlash is Paul Humpfer, an accountant who wrote the anti-illegal immigrant measures. For him, it is simple: 'People just don't think it's their own town any more.'

Critics say such moves are resonant of the laws of the racially-segregated South, as people single out one ethnic group for different treatment. The agitators say their communities are drowning under a wave of crime and that they simply want to see the law upheld.

In Carpentersville, the twice-monthly meetings of the village board have assumed epic proportions. As many as 2,000 people show up. Elections have taken on a strident tone. Humpfer and his anti-illegal immigrant colleagues ran for office as the All America Team. They distributed a flyer that listed grievances against illegals. 'Are you tired of seeing the Mexican flag flown above our flag?' it asked. Humpfer denies being racist: 'It hurts. That could not be further from the truth.'

The list of towns like Carpentersville is long. It includes Farmers Branch in Texas, where residents oppose the opening of a Hispanic supermarket, and Hazleton, Pennsylvania, where anti-immigrant laws were overturned in court. It stretches from Prince William County in Virginia to South Carolina's Beaufort County, where all non-English language on official signs has been removed. 'Carpentersville is all of our towns. We are a nation of immigrants, but also a nation of xenophobes and nativists,' says Professor Rumbaut.

The power of the backlash was most keenly felt in the defeat of Bush's immigration bill. Tens of thousands of activists rallied against it, sending literally millions of faxes to politicians that scared them into voting down the law. The main group behind the protest, Numbers USA, had just 55,000 members three years ago. Now it has more than half a million. Much of their distress over immigration is based on a simple fear of difference. 'They come here to work but they make no effort to integrate. They do not want to,' says Edwin Rubenstein, an economics consultant and commentator on anti-immigration issues.

The hero of the anti-immigration backlash is Harvard professor Samuel Huntington, whose 2004 book Who Are We?: America's Great Debate postulated that Hispanic immigration would destroy America's protestant Anglo-Saxon character. 'He was right,' says Rubenstein, whose own ancestors were Russian Jews. 'They keep their culture and customs. When other immigrants arrived they had to break their bonds and commit themselves to the US for better or worse.'

But behind the cultural and political arguments lies a more powerful economic phenomenon. Hispanic migration is also driven by the desire of major corporations to create a low-wage workforce. The fear of the American middle class is not just over Spanish or a brown skin; it is also a more justifiable anxiety that jobs are disappearing and wages being lowered. Much of the rhetoric of the right attacks big business. 'It is a betrayal. The corporate elites have hijacked government on behalf of business interests and profits,' says Rubenstein.

That may be true. But the backlash is having an impact on ordinary Hispanics, not big business. There are regular round-ups of illegal immigrants. Often parents are deported while their American-born children, who are citizens, remain. There are an estimated 3.1m children at risk of being in such a parentless situation. Many towns which have passed anti-immigrant laws have sparked an exodus of their Hispanic residents, illegal or not. 'These are a kind of pogrom,' says Rumbaut.

Yet the fears of 'nativists' seem to have been blown out of all proportion. America is transforming, but the more it changes, the more it looks the same. In interview after interview, Hispanic Americans show that - as with those other waves of Italians, Irish and Jews - the power of assimilation is strong.

Take George Torres. He grew up the son of Cuban immigrants in south Florida and loved sport. But he eschewed traditional Hispanic games like soccer. Instead, his childhood played out in the shadow of the Miami Dolphins' American football stadium. Now he is a director of the club. 'Many Hispanics embrace [American] football as a form of cultural assimilation. There is no football in Colombia or Mexico. It is an American tradition and they want to be at the heart of it,' Torres says.

And there's Flaco Navaja. He is a poet, singer and actor in New York City and the son of a Puerto Rican nationalist father. Sitting in a swanky cafe on Manhattan's Upper West Side, he talks of a poor childhood growing up in the South Bronx and his pride in his Hispanic identity. 'My dad refused to speak English to us,' he says. Yet the story of Navaja's family is a classic American tale. His parents, once poor and struggling, have retired and own their own home. Navaja will soon appear in films with Sigourney Weaver and Ed Norton. 'Yeah, I guess that is the American dream,' he laughs. 'But we can maintain our own identity.' Then he laughs and tells me about his young daughter. She is 10 years old and her native language is English. 'She's learning Spanish. I'm teaching her,' he shrugs and smiles.

But the fact is that while the Hispanicisation of America is strong, so is the Americanisation of its Hispanics. Academic studies have shown that Spanish is only spreading so fast because of new immigrants. Among Hispanics born and bred in America, it almost always dies out. 'It is unmistakeable,' says Nestor Rodriguez at the University of Houston. 'By the third generation, English is dominant in 95 per cent of families.' You can see that in the personal stories of those who chart the assimilation. When Professor Rumbaut's Cuban-born father spoke English, his strong accent marked him out as 'other'. Yet Rumbaut himself became an academic who testified before Congress on immigration issues. And Rumbaut's 10-year-old son? 'When I speak to him in Spanish, he answers in English. I have not just studied this experience,' Rumbaut says. 'I have lived it.'

As with all revolutions, the Hispanic immigration will leave untouched as much as it alters. A Hispanic America will still be America. Perhaps that is because it is a fundamentally human story whose emphasis on language, skin colour and cultural differences masks the universal desire to make a better life. That is also why it is impossible to stop. When Rodolfo Acevedo, the Florida waiter turned architect, arrived from Argentina he brought not just his language and culture but his drive and ambition. 'I never lost sight of my dream,' he said. His new career is going well. Acevedo recently won a huge new project. Soon his buildings will start popping up across Florida. He has made them pleasant, light and eco-friendly. He has ensured they are as welcoming as possible to those who will use them. For he has designed Florida's new immigration centres.