Cortés, meanwhile, weighed his options. He had not yet seen the magical city of Tenochtitlán, but he knew it was there, 200 miles away. He faced imprisonment or death for defying the governor if he returned to Cuba. His only alternative was to conquer and settle part of the land. To do this, he prompted his supporters to install a municipal and resigned from the post conferred on him by Velásquez. The legally-constituted "town council of Villa Rica" then offered him the post of captain-general. He accepted the post and severed his connection with Velásquez. Those of his men still loyal to the Governor of Cuba conspired to seize a ship and escape to Cuba, but Cortés moved swiftly to quash their plans. To make sure such a mutiny did not happen again, he decided to sink his ships, on the pretext that they were not seaworthy.

His ships sunk, Cortés marched into the interior, to the territory of the Tlaxcalans. They were resolute enemies of Mexico and Cortés thought they might join him in a military alliance against the Aztecs. After a long debate, the Tlaxcalans decided to fight Cortés instead, and they suffered terrible losses. Eventually they sued for peace and agreed to go with Cortés to Mexico. Cortés marched on with the Tlaxcalan warriors to Cholula, 20 miles from Tlaxcala. A story spread from the Tlaxcalans to Malinche that the Cholulans were planning to trap Cortés inside the city and massacre his army. When the Cholulan leadership and many of their warriors gathered, unarmed, in a great enclosure by the pyramid temple of Quetzalcoatl, the Spanish and the Tlaxcalans killed them. The massacre had a chilling effect, provoking other kingdoms and cities in Montezuma's empire to submit to Cortés' demands.