Although the Río de la Plata was explored as early as 1515, it was not until 1624 that the Spanish established the first permanent settlement, at Soriano in SW Uruguay. The Portuguese founded (1680) a short-lived settlement at Colonia, and in 1717 they fortified a hill on the site of Montevideo. Fearing encroachment and competition, the Spanish drove them out (1724) and from then until the wars of independence controlled the Banda Oriental. Uruguay's position between Spanish and Portuguese settlements, and later between Argentina and Brazil, helped determine the emergence of Uruguay as an independent state. On the pampas stock raising spread; gradually the unbounded range gave way to huge estancias (cattle ranches) and small settlements concentrated about the ranch buildings.
It was the rough and hardy gaucho who fought for independence, and the traditions, personal loyalties, and rivalries of the gauchos helped to keep the nation in almost continual strife for three quarters of a century after independence was won. When the revolutionary banner was raised in the Argentine in 1810, the leaders of the Banda Oriental, notably Artigas, accepted the cause, but in 1814 Artigas broke with the military junta of Buenos Aires and began a struggle for Uruguayan independence that lasted until the Brazilian occupation of Montevideo in 1820. Five years later a small group, known as the Thirty-three Immortals, under the guidance of Lavalleja, declared Uruguay independent.
In 1827 at Ituzaingó Brazil was defeated. Great Britain, opposing Brazilian expansion south to the Río de la Plata, helped ultimately to create an independent Uruguay as a buffer state between Argentina and Brazil. The peace (1828) stipulated that the new Uruguayan constitution should be acceptable to both the larger nations. When it was adopted in 1830, Fructuoso Rivera was chosen as president. He was promptly faced with revolts led by his old rival, Lavalleja, and when he was succeeded in office by Manuel Oribe, he himself revolted against Oribe, who was in sympathy with Juan Manuel de Rosas of Argentina. In the long fratricidal struggle that ensued, the two dominant political parties of Uruguay emerged, Rivera's Colorados [reds] and Oribe's Blancos [whites].
Oribe was driven out in 1838, but later with the aid of Rosas returned to begin the long siege of Montevideo. The Italian patriot Garibaldi fought in the Uruguayan wars from 1842 to 1846. In 1851 the Argentine general Urquiza drove out Rosas and brought an end to the Uruguayan civil war. When in 1864 Brazil presented a claim for damages to property and nationals during the civil wars, Uruguay refused to accept it. Brazil invaded and, aided by the Uruguayan general Vanancio Flores (a Colorado), overthrew the Blanco president. Paraguay, under Francisco Solano López, came to the assistance of the Blancos, whereupon Argentina, Brazil, and Uruguay formed a tripartite alliance against Paraguay (see Triple Alliance, War of the). During the 19th and 20th cent. waves of immigration, chiefly from Europe, augmented the Uruguayan population.
Until the rise of José Batlle y Ordóñez early in the 20th cent., Uruguay experienced many revolutions and counterrevolutions. In Batlle's second term as president (1911–15), however, began the social and material progress that made Uruguay one of the more stable and prosperous nations of Latin America. By a coup in 1933, Gabriel Terra suspended the constitution of 1919, and his rule was strongly personalistic. Yet, under Terra's rule, which ended in 1938, the socialistic measures for public welfare were not reversed but forwarded; the labor code was broadened, social benefits increased, and industry further nationalized.
Batlle's influence on Uruguayan political practice did not end with his death; concerned lest the country again fall prey to dictatorial caudillos, he had advocated the creation of an executive governing council. This reform, inspired by the Swiss multiple-executive system of government, was adopted in 1951; the office of president was abolished and replaced by a nine-man council with a president, chosen from the majority party, to act as titular head of state. The plural executive, however, proved ineffectual; factionalism and apathy within the council hindered action on social and economic problems, which became pressing in the mid-1950s and acute during the 60s.
The increasing use of synthetics and the steadily declining price of wool cut deeply into Uruguay's exports of wool and leather. Inflation and unemployment grew, and the vast, inefficient bureaucracy became a burden to the economy. In 1958 the Colorados, who had been in power for over 93 years, were overwhelmingly defeated by the conservative Blancos, who won again in 1962 by a narrower margin. Throughout the 1960s and early 70s the economic decline continued, intensified by droughts and floods and accompanied by massive social unrest—riots, paralyzing strikes, and the emergence of a terrorist Marxist guerrilla group, the well-organized Tupamaro National Liberation Front (see Tupamaros).
In 1967 a new constitution abolished the plural executive and reinstated a powerful president. That same year the Colorado party returned to power, with Oscar Gestido as president. Gestido died after several months in office and was succeeded by his vice president, Jorge Pacheco. Pacheco and his hand-picked successor, Juan María Bordaberry (who was elected in 1972), ruled with increasingly dictatorial powers. As the Tupamaros increased their terrorist activities, kidnapping foreign diplomats and assassinating high officials, the army assumed tremendous power, even successfully pressuring President Bordaberry (June, 1973) to dissolve the congress and suspend the constitution. The military, which made Aparicio Méndez president in 1976, ruled Uruguay with brutal force, regularly disregarding human rights by kidnapping, imprisoning, torturing, or murdering citizens.
The government's repressive tactics caused a massive emigration of Uruguayans, mostly to Argentina. After a 1980 plebiscite to continue de facto military rule was voted down by the populace, the military government steadily lost power. General Gregorio Álvarez became president in 1981. In 1985, Julio María Sanguinetti of the centrist Colorado party became president, restoring civilian government but also granting amnesty (1986) to former leaders accused of human-rights violations (for crimes committed in Uruguay). Luis Alberto Lacalle Herrera of the conservative National (Blanco) party became president in 1990. He was forced to form a coalition government in order to secure a parliamentary majority, and his attempts to introduce free-market reforms were obstructed.
Sanguinetti was returned to the presidency by a slim margin in the 1994 elections, and also had to form a coalition; he sought cutbacks in Uruguay's bankrupt social security program and modest amounts of privatization. In 1999, Jorge Batlle Ibañez, also of the Colorado party, was elected president; during the election, he faced a strong challenge on the left from the Broad Front's Tabaré Vázquez, the former mayor of Montevideo. Since the late 1990s the country's economy has been hurt by crises in the economies of Brazil and Argentina, its principal trade partners, resulting in several years of recession that became particularly severe in 2002. In 2003, Batlle Ibañez announced that the government would compensate families of victims of the 1976–85 military dictatorship and of the guerrilla groups that opposed it.
Uruguay's economic difficulties enabled Tabaré Vázquez to win the presidency without a runoff in 2004; his Broad Front coalition also won majorities in both legislative houses. Vázquez became the first leftist to be elected president in Uruguay. The planned construction in Uruguay of two pulp mills on the Uruguay River along the Argentina border led to tensions between the two nations throughout 2006; fearful of possible pollution from the mills, Argentinians blockaded several bridges between the nations. The International Court of Justice agreed to hear Argentina's contention that the mills violated a treaty on the use of the river but allowed construction to proceed (Uruguay built just one mill) while the court considered the case; it also refused to order Argentina to stop the protests, which continued until June, 2010. In 2010 the court ruled that although Uruguay had failed to adhere to its procedural obligations under the treaty, it had not violated its environmental obligations and the mill could continue to operate. An accord establishing a joint environmental monitoring committee for the river was signed in Nov., 2010.
Also in 2006, former president Bordaberry was charged and arrested in connection with the political murders of dissidents and others in 1976; he was convicted in 2010 of having violated the constitution during his presidency. In 2007 former president Álvarez was arrested on similar charges and was convicted in 2009. The supreme court in 2009 declared the 1986 amnesty law unconstitutional. In the Oct., 2009, elections the Broad Front won a narrow legislative majority, and after a runoff in November its presidential candidate, José "Pepe" Mujica, a former leftist guerrilla, also won. Legislation to overturn the amnesty law failed to pass in May, 2011. Although Mujica had not backed the legislation, he signed a decree in June that allowed as many as 80 human-rights cases to proceed, and in October a law revoking the amnesty was enacted. In 2013, however, the supreme ruled aspects of the law unconstitutional, effectively restoring the amnesty.