Iberian Union

After Philip was declared king of Portugal, he decreed that his new realm would be governed by a six-member Portuguese council; that the Portuguese cortes would meet only in Portugal; that all civil, military, and ecclesiastical appointments would remain Portuguese; and that the language, judicial system, coinage, and military would remain autonomous. Philip supported the two institutions in Portugal that he believed might unite the two countries: the Jesuits and the Inquisition. One result was that New Christians were persecuted even more severely.

The incorporation of Portugal into the Iberian Union was accepted by the Portuguese nobility without much difficulty. The royal court had used the language and etiquette of Castile since the fifteenth century, and much serious work had been done in Castile by Portuguese writers, who were conscious of belonging to a common Iberian culture. In the countryside, however, there developed a current of resistance that took the form of a messianic cult of the "hidden prince," Sebastião. Members of this cult believed that Sebastião did not actually die at Alcázarquivir but would return to deliver Portugal from Spanish domination. This cult became deeply rooted, and over the years a number of impostors appeared and sparked rebellions, all of which were easily put down. To this day, Sebastianism (Sebastianismo), or the nostalgic longing for the unattainable, is a continuing feature of Portuguese life.

During the reign of Philip II, the terms of the proclamation of the union of the two crowns were generally upheld. With Philip's death in 1598 and the ascension to the Spanish throne of his son, Philip III, much less respect began to be paid to the provision that preserved Portugal's autonomy. Philip III did not visit Portugal until 1619, very near the end of his reign, and he began to appoint Spaniards to the six-member governing council as well as to lesser posts. His son and heir, Philip IV, had no interest in government and consequently turned over the administration of Portugal to the duke of Olivares. The duke alienated Portuguese of all classes, including the hispanophile elite. In order to prop up the waning power of the Spanish monarchy, he levied excessive taxes and troop requisitions on Portugal to support Spanish military activities, especially against France. Moreover, he sought to unify Portugal with Spain.

In 1637 a rebellion broke out in Évora when the Spanish attempted to collect these taxes by force. Portuguese nobles were summoned to Madrid and ordered to recruit soldiers for war against France. The Portuguese nobility, encouraged by Cardinal Richelieu of France, who promised to support a Portuguese pretender with soldiers and ships, began to conspire against the Spanish. During the 1637 rebellion, the populace acclaimed João, duke of Bragança, as king. The duke, who was the nearest noble to the House of Avis, was Portugal's leading aristocrat and largest landowner. The choice of the populace was supported by the nobility, which conspired to make João king. The duke, who was cautious, initially resisted accepting the Portuguese crown, but eventually began to equip a private army. In 1640 the Catalans rebelled against Philip IV, and, thus encouraged, João's supporters went into action on December 1. They entered the royal palace and arrested Portugal's Spanish governor, the duchess of Mantua, a cousin of the king of Spain. Five days later, the duke of Bragança arrived in Lisbon and was crowned as João IV (r. 1641-56), thus restoring the Portuguese monarchy and founding a new ruling dynasty, the House of Bragança.

Although Portugal's seaborne empire had begun to decline before the sixty years of incorporation in the Iberian Union, the "Spanish captivity," as this period is called by the Portuguese, hastened this process. The Portuguese, who were dragged into Spain's wars with England and Holland, began to see those two countries attack their holdings in Asia, as well as in Brazil. By the time independence was regained, Portugal's empire was greatly reduced, having lost its commercial monopoly in the Far East to the Dutch, and in India to the English. Only the resolute action of Portuguese settlers had saved Brazil from the Dutch, who had attacked Rio de Janeiro and Baía, and occupied Pernambuco.