The San Salvador earthquake of 10 October 1986 resulted in 1500 deaths, 10,000 injuries, and 100,000 people left homeless. The earthquake has a surface-wave magnitude (MS) of 5.4, and using strong-motion data, we estimate a moment magnitude (M6−) of 5.7. Focal mechanisms and aftershock distributions from locally recorded seismic data indicate that the earthquake was caused by near-surface, left-lateral slip on a N25°E-trending fault located directly beneath the city of San Salvador. Although strong ground motion lasted for only 3 to 5 sec, horizontal ground accelerations of up to 0.72 g were recorded. Seismic amplification by a surficial layer of low-velocity ash may have increased ground accelerations and thereby contributed to damage of adobe as well as engineered structures that seems excessive for such an earthquake magnitude. Since 1700 the city has been severely damaged at least nine times by similar moderate magnitude shallow-focus earthquakes. Such earthquakes are common along the heavily populated Central American volcanic chain and pose a major seismic hazard to numerous cities and towns that share a geologic setting similar to that of San Salvador.