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In 1946, the Philippines was granted independence. Olongapo was one of the principal naval bases retained by the United States. The Navy started rebuilding the town after hostilities ceased. Olongapo was built on a new undeveloped site a couple of miles north of its former location. The prewar town site became part of the base.

The first few years after the war were difficult for the new town, as everything in the new Olongapo was damaged. There were no electric power and no drainage system. The water supply and sanitation facilities were inadequate, and streets were unpaved. Gradually, Olongapo evolved into a new community: new businesses were established, housing projects were planned and civic facilities were restored.

During the Korean War, the United States spent over US$170 million to convert the base into the homeport of the Navy's Seventh Fleet, developing the Cubi Naval Air Station as the largest US installation of its kind in Asia. Naval authorities relocated the residence from the area of the former Public Works Center area to the intersection of what is now known as Rizal Avenue and Ramon Magsaysay Drive, and in the Barangays New Asinan and New Kalalake areas. Zoning of Olongapo was patterned after American practice where streets are constructed along straight lines. The magnitude of facilities construction in the Olongapo and Subic Bay area brought growth and prosperity to Olongapo.

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