Officially, the Republic of Nicaragua endorses no religion. In practice, the overwhelming majority of Nicaraguans call themselves Catholic, with over a hundred evangelical Protestant sects comprising about 9–15 percent and increasing annually.

Beginning in the early 1970s and continuing through the revolution, Nicaragua created its own version of liberation theology, a school of Christianity and bourgeois thought that equated Jesus’s teachings with Marxism. The degree to which biblical parables were equated to the Marxist struggle varied, and the most radical versions placed Sandino as Jesus or Moses, Somoza as the Pharaoh, and the Nicaraguan masses as the Israelites searching for their promised land through revolutionary struggle.

A tiny percentage of Nicaraguans are descendents of one of the several Jewish families that found refuge here during World War II. Some of them still identify themselves as Jewish, but there is no real practicing community. The only synagogue was dismantled and sold in 1980. A Torah did not return to Nicaragua until 2008.

Most Nicaraguans, especially in the countryside, have little concept of Judaism as a modern religion, relating the word judío only to the ancient race of hebreos they read about in the Old Testament.

In 2008, the construction of a mosque in Managua raised eyebrows in the diplomatic community, who feared increasing Iranian influence. It was instead the work of the growing Lebanese community, present in Nicaragua for a century but only now numerous enough to consider building their own place of worship.