Second-half goals by Eduardo and Mario Mandzukic secured victory for Croatia.
Croatia manager Slaven Bilic made several changes following the defeat at group winners Greece four days ago, with midfielders Darijo Srna and Ivan Rakitic replacing Ognjen Vukojevic and forward Nikica Jelavic in the starting lineup.
Croatia looked lively from the start and dominated the game, creating a host of chances was broken only in the 66th minute when Eduardo met a cross by Ivan Strinic with a fine close-range header.
Mario Mandzukic made it 2-0 six minutes later after a superb cross by Croatia captain Darijo Srna.
Croatia created a number of chances in the last 30 minutes but failed to improve their goal difference.
"Today we showed that we are a team and that we managed to come back following the bad atmosphere surrounding the team in the past few days," Croatia goalkeeper Stipe Pletikosa said, referring to media criticism of Bilic following the team's defeat by Greece.
"We analysed Latvia's style thoroughly and we knew they would allow lots of space for creating chances along the flanks. Everybody in the midfield played well, and we could have scored many more goals," Bilic said.
