In 1983, Hernandez published the first part of the first Heartbreak Soup story in Love and Rockets #3. This began Palomar, Hernandez' magic realist magnum opus which was completed in 1996. These stories take place in the fictional rural Latin American village of Palomar, where modern technology and rampant consumerism have yet to reach—or even phone lines. The focus on the stories was on the characters, with their variety of personalities, rather than on action as in superhero comics, or on shock value as in underground comix. Over the years, the Palomar stories became longer, more complex and more daring, especially in the long story "Human Diastrophism", in which a serial killer appears in Palomar, whose identity is only known by an unstable artist who slowly loses his mind.

The first volume of Love and Rockets came to an end in 1996, with its fiftieth issue. Hernandez brought the Palomar stories to an end with a devastating earthquake, which briefly brings together many of the characters who had moved out of the village. The story closes with Luba and her family leaving for the United States to escape from hitmen.Jaime and Gilbert went their separate ways. Gilbert continued with Luba and her family in series such as LubaLuba's Comics and Stories, and edited to the children's anthology Measles before its early demise.