Under the American regime, Cagayan de Misamis became a center of commerce, migration, and education in Northern Mindanao. Several American governors-general visited Cagayan. These were William Howard Taft (later the 27th President of the United States), William Cameron Forbesy, James F. Smith and Theodore Roosevelt, Jr. The town was also graced several times by the visits of Manuel L. Quezon and Sergio Osmeña, Sr. Misamis Oriental became a separate province in 1930 through Legislative Act 3777.

On March 17, 1942, General Douglas MacArthur and his family arrived at Macabalan wharf in Cagayan de Misamis from Corregidor to escape the advancing Japanese forces. MacArthur stayed in Del Monte for four days from where American planes fetched and flew him to Australia, where upon arrival he uttered his now-famous "I Shall Return" promise. A few days later, on March 26, 1942, Quezon and Osmeña arrived in Cagayan to take the same escape route. Quezon spent his last breath on Philippine soil in Northern Mindanao, for he died on August 1, 1944 in New York.

On May 1, 1942, Cagayan de Misamis was invaded by the Japanese Kawamura Detachment that sailed from the port of Iloilo. Using the "scorched earth" policy, the Japanese razed the whole town to the ground and occupied the major buildings for their headquarters. Guerilla activity was rife in the Northern Mindanao countrysides from where a "Free Cagayan Movement" was launched. Cagayan suffered much from World War II until American planes bombarded the town on October 10, 1944 in an effort to drive out the Japanese. Cagayan de Misamis was liberated on May 10, 1945.

Reeling from the ashes of war, Cagayan began its lobby in the Philippine Congress for a city charter beginning in 1946 through the then Congressman of Misamis Pedro Sa Baculio. On December 17, 1949, Misamis Congressman Emmanuel Pelaez introduced in Congress House Bill No. 54 entitled "An Act Creating the City of Cagayan de Oro". President Elpidio Quirino signed the city charter at 11:30 in the morning of June 15, 1950. It was Pelaez who conceived of the idea to append the "de Oro" to its name as a distinctive mark of the new city which had already earned a reputation since the 1500s in the Hispanic era as a place that was abundant in gold due to the placer mining that begun in its hinterland barrios. It was also on that day of its inauguration as a city that it ceased to be known as "Cagayan de Misamis". The first city mayor of Cagayan de Oro was Max Y. Suniel. The position of  city mayor was then an appointive office. The first elections for city mayor took place on November 1955. Justiniano R. Borja became the first elected city mayor of Cagayan de Oro. He was first appointed city mayor in 1954 and was repeatedly appointed and elected until he died in office on October 3, 1964. He was known as the "Arsenio Lacson of Cagayan de Oro" and was responsible for the phenomenal economic growth of the city when he opened the Cogon area in 1959.