A Spanish-language fusion of dancehall reggae, hip-hop, salsa, cumbia, merengue and other Caribbean flavors, reggaeton (pronounced reggae-TONE) percolated for years in the streets and clubs of Puerto Rico before making its way to the continental USA. Its infectious, driving rhythms and the sexy bump-and-grind dancing that it inspires made it a favorite in clubs, particularly in such cities as New York and Miami.

"What really made it explode in New York was so much demand in the Latin community," says DJ Camilo (Juan Camilo Sanchez) of New York's influential radio station Hot 97. "It really started with the mixtapes and the buzz in the streets. I would be working clubs six and seven nights a week and seeing how people kept requesting it. Once I took it to the radio, it opened up so many avenues."

Reggaeton has its roots in Panama, where Spanish-language reggae was developed in the 1970s by Jamaicans who were descendants of immigrants who helped build the Panama Canal. The new hybrid eventually found its way to Puerto Rico, where rapper Vico C (Luis Armando Lozado Cruz) produced the first Spanish-language hip-hop record in 1985. Ultimately, the two influences combined into a music that appealed to urban youth in Puerto Rico and eventually evolved into contemporary reggaeton.

Much like hip-hop in the USA, reggaeton was initially dismissed, but continued to grow. Hector el Bambino, reggaeton's equivalent to rap production mastermind Dr. Dre, says that because it was a blend of so many musics, it cut across cultural lines and began spreading throughout the Caribbean, Central America and South America, and then filtered into the USA. The music — which like hip-hop has faced criticism over its sometimes violent and sexually charged lyrics — gave birth to its own entrepreneurs, record labels and distributors, who flourished independent of corporate assistance.

Now, however, a struggling record industry — eager to tap into the 41-million-plus U.S. Hispanic population — is signing acts to major-label deals and creating new imprints and divisions.

Atlantic Records recently signed Tego Calderon, who has his own imprint, Jiggiri Records. Universal Music Group, which already had Universal Music Latino, created Machete Music. Other recent labels include Wu Tang Latino, Def Jam's Roc La Familia, and the P. Diddy/Pitbull partnership Bad Boy Latino.

"The music certainly appeals to the Latino/Hispanic population, and it appeals on the mainstream side because these artists are speaking to the same consumer who likes 50 Cent, Usher, Eminem and T.I.," says Atlantic co-chairman/COO Craig Kallman. "When you have an Usher or a 50 Cent reaching out to Tego Calderon to get him on their records, you know these artists are making an impact."

And if there is a language barrier, the music helps make it disappear.

"You can go to a club and hear people freaking out to a Daddy Yankee song, and the vast majority have no idea what he's talking about," says music magazine Blender's Jonah Weiner. "What really appeals is the sonic quality, which is a hard digital pounding with a very infectious rhythm."

Several radio stations nationwide have switched to reggaeton/hip-hop formats (sometimes known as "hurban," for Hispanic urban), and as a result, the genre is doing well not only on the Latin charts, but on rhythmic top 40 lists as well.

Reggaeton superstar Daddy Yankee, whose 2004 album Barrio Fino is the first reggaeton album to sell1 million copies, will soon add more fuel to the genre's wildfire spread into mainstream culture with his first major arena concert tour. It starts at New York's Madison Square Garden Aug. 27.

"I've always dreamed of touring by myself," says Daddy Yankee, who will hit several cities in the USA and stop in Ecuador, Colombia and Venezuela. "We're introducing reggaeton to the masses now. We've been doing this for the last 13 years, so for the Latin community this is not new. But this tour is not just for the Latin community. It's for everybody."

The boom has put the national spotlight on other longtime genre stars, such as El Bambino, Don Omar and Calderon, who now stand to finally reap benefits after years of fighting for acceptance.

"It was a very hard time," says El Bambino. "We played in the projects because those were the people who embraced us, and we exposed their problems and feelings. They were our first fans and are still our biggest fans, and that's why we don't forget them."

Reggaeton is the latest genre of Caribbean music to filter into the U.S. mainstream. The success of dancehall star Sean Paul's double-platinum Dutty Rock opened up the market for other sounds from that region. Last year, Kevin Lyttle had a hit with his danceable soca song, Turn Me On. Reggaeton's breakthrough was sparked last year by American rapper N.O.R.E.'s Oye Mi Canto, which featured Daddy Yankee and Nina Sky. Daddy Yankee's Gasolina, Don Omar's Reggaeton Latino and Tony Touch's Play That Song are all bubbling up the charts. (Daddy Yankee and Don Omar have five tracks between them getting significant airplay this week.)

"That song Oye Mi Canto was the key to introduce reggaeton to the masses," says Daddy Yankee. "It's like what Rapper's Delight (by the Sugarhill Gang) was for the hip-hop movement in the early '80s."

In coming months, expect music from other stars and producers, including Calderon, Boy Wonder, Luny Tunes, Wisin & Yandel, Ivy Queen, Baby Rasta & Gringo and Zion & Lennox, to make an impact.

Reggaeton and Latin hip-hop artists have been readily embraced by their U.S. counterparts; stars such as Fat Joe, R. Kelly, Missy Elliott, Cypress Hill and Nas also have done collaborations. Both sides benefit, as the Latin musicians gain entree to the hip-hop market, while hip-hop stars gain fans they might not have attracted otherwise.

El Bambino will share a stage with Fat Joe at AmsterJam, a daylong festival at New York City's Randall's Island on Tuesday, sponsored by Heineken. El Bambino has recently partnered with Jay-Z on a label deal and a clothing line, which will be distributed through Jay-Z's Rocawear. The pair will collaborate on an album, The Club Bangers, to be released this fall.

The corporate world has taken note. Daddy Yankee, for example, recently signed an endorsement deal with Pepsi, and Hennessy has used Calderon prominently in its ad campaigns. Heineken's Andy Glaser says he tapped El Bambino for AmsterJam in part because "there really isn't a hotter sound right now than reggaeton."

Latin rap star Don Dinero says reggaeton's popularity is helping boost the fortunes of Spanish-language hip-hop stars, as well.

"Reggaeton and hip-hop are bunched into what we consider Latin urban music," he says. "Reggaeton is an urban movement, but it's more for the girls to dance to. But it's helped Latin hip-hop because it has raised the standards."

Reggaeton is seen as the vanguard of a broader Latin urban music movement that could continue to grow for years. Experts say that Mexico's underground hip-hop movement, which hasn't yet gotten much radio exposure, could be the next big thing.

"I think what reggaeton has done is open the door, and in the coming years we are going to see a lot of fresh talent coming out," says Gustavo Lopez, president of Machete Music.

Executives and artists agree that maintaining the music's authenticity is crucial to long-term success.

"You have to look at it as a marriage of two companies that do different things well," Kallman says of his partnership with Calderon. "We have to empower Tego and his brand label to be effective with things they have done, and it's our job to take them to the next plateau, and get them the national and international platform that they can't get on their own."

"The labels need to keep it real," Lopez says. "There is a culture there, and people signing these acts need to realize that they need to be real to the streets and not try to change much of the formula."

"The one thing I always like to stress is that this is not a fad," he adds. "This is not Macarena or Lambada or a one-song movement. It's got a lot of artists and a lot of talent behind it. Artists who were struggling are starting to see the benefits. The key will be how will these radio stations that are switching break new acts. The Daddy Yankees, the Don Omars and the Tego Calderons are great. But how many new acts can we bring to the table in coming years?"

"For this to grow, it took a little bit of luck, and it took a little bit of good timing," adds Dinero. "But now it is going to take a lot of business savvy for this reggaeton and this whole Latin urban movement to take it to the next level."