The Uruguay crisis was an international conflict involving rival South American alliances led by Argentina and Brazil as well as rival European powers France, Britain, and Germany. Argentine forces invaded Uruguay and defeated Brazilian forces sent to liberate the country, but a British expedition occupied Uruguay and Rio Grande do Sul and forced the demilitarization of Argentina.
The Argentine Confederation had formed an alliance with Uruguay in 1837, and this friendship remained unshaken for years, even as Uruguay's government changed from conservative, pro-Argentine Blancos to liberal, anti-Argentine Colorados. This dynamic changed with the outbreak of the First Araucania War in 1854, when Uruguay chose to side with Chile over Argentina, inaugurating a decade of rivalry between the countries. After the Second Araucania War came to an end in 1862, the Argentine government planned to annex Uruguay, remove an important threat from its flank, and secure its naval bases for itself.
Argentine forces quickly occupied Paysandu before defeating the Uruguayan army defending Montevideo on 15 May 1865 and occupying the capital. Brazil promptly dispatched forces into the Argentine-occupied Rio Grande do Sul, where, on 4 August, General Aurelio Tavares' 22,320-strong Brazilian army was crushed at the Battle of Passo Fundo, suffering 18,497 casualties. On 29 August 1865, a Brazilian army of 11,580 troops under General Emilio Brandao was wiped out at the Battle of Encarnacion in Paraguay. On 5 September, as Argentine forces occupied the near-defenseless Paraguay, Argentina added to its war goals the annexation of what remaind of Alto Paraguay.
Argentina's war machine seemed to prove unstoppable, as General Angel Pacheco won victory after victory against Argentina's enemies. On 26 September 1865, Aurelio Tavares' army was again crushed at the Battle of Misiones, leaving 12,414 Brazilians and 7,512 Argentines dead. On 28 September 1865, Argentina formally annexed Uruguay.
The Argentine conquest of Uruguay sparked an outrage in Europe, where the Great Powers colluded to restore the balance of power in South America. The United Kingdom, the North German Federation, the Russian Empire, the Netherlands, and several colonial allies declared war on Argentina, forming a coalition that demanded the demilitarization of Argentina for ten years and Argentina's payment of British taxes. However, only Britain and Germany would contribute soldiers for an expedition to South America.
For Argentina, the war resumed as usual. On 10 November 1865, the Argentines crushed Tavares' remaining 4,431 troops at the Battle of Alegrete. Brazil continued to dispatch armies south to prevent an Argentine invasion of Brazil, but the 7 December 1865 Second Battle of Passo Fundo saw Vital de Braganca's 16,778-strong Brazilian army suffer 11,667 casualties. By then, Argentine manpower began to be depleted. Pacheco's victories had cost thousands of Argentine soldiers, and, after Passo Fundo, he had 18,104 troops to face tens of thousands of Brazilian reserves and Anglo-German expeditionary soldiers. On 1 January 1866, the Second Battle of Misiones saw a fresh Brazilian army suffer significant casualties while inflicting Argentina's first defeat, reducing Pacheco's army to 12,576 troops. By then, however, Brazil's offensive had ground to a standstill, and Brazil agreed to an armistice on 17 January 1866. Argentina had lost 27,306 troops, while Brazil lost 64,676 men and Uruguay lost its entire army of 6,000. Chile and Paraguay had been preoccupied by the wars with Peru and Bolivia, and, on 20 March 1866, Paraguay agreed to cede Alto Paraguay to Argentina.
As Paraguay exited the war, however, British and German expeditionary forces landed in Uruguay. British troops quickly occupied much of the country, and General Wallace Havelock's 42,000 troops of the British 6th Army faced no resistance from the battered Argentine army. Instead, the Argentines - having replenished their forces from across the country - opted to attack Maximilian von Brandt's 17,805-strong army as it occupied the city of Parana. In the ensuing Battle of Parana on 20 October 1866, Pacheco's 33,197-strong army suffered 24,576 losses while attacking Brandt's force, inflicting 16,319 losses. With Argentina fielding only 8,621 troops against the surviving 17,805 Germans and 42,000 fresh British troops, President Bartolome Mitre entered into negotiations with the Allies and their enemies. Mitre persuaded France to join the war on his side, threatening the British and the French with a European front to the conflict. Germany was already at war with Austria in the Austro-Prussian War, while the British public was opposed to a war on the European continent. On 16 December 1866, the British reluctantly agreed to a white peace.
Argentina came out of the war in control of Uruguay and Alto Paraguay, although it had lost nearly 52,000 of its soldiers in the process, devastating its manpower pool. Brazil was undoubtedly the biggest loser of the conflict, having thrown several armies at Argentina and lost nearly 65,000 men in failed assaults. However, Brazil's refusal to accept the loss of Rio Grande do Sul would lead to continued conflict.