With the treaty of San Ildefonso, Uruguay began her real existence. Montevideo was made the greatest fortress on the Atlantic coast, commanded by its own military governor, strongly garrisoned and provisioned, and with over one hundred cannon mounted on its walls. The Charruas had long been driven back from the coast, and as soon as the danger of Portuguese interference was over settlements spread rapidly along the whole southern border. Prior to 1777 there were only five towns in Uruguay, but within the next five years the number tripled. By the year 1810 there were seventy-five hundred people living in the city of Montevideo, seventy-five hundred in its immediate district, and sixteen thousand in the outlying settlements. Outside of Montevideo, cattle-herding was the sole business, and the people were a hard-riding, meat-eating, bellicose race. Immediately to the north-east lived fifty thousand Rio Grandenses of Portuguese blood and speech, who, in like surroundings, had acquired the same pastoral and semi-nomadic habits as their Argentine and Uruguayan neighbours, and who constantly made incursions over the Spanish border. The Uruguayan gauchos retaliated, and for nearly a century continuous partisan warfare went on, for these half-savage cattle-herders recked little of treaties or boundary lines. The Spanish guerrillas bore the name of blandenques, and in this school of arms the future generals of Uruguay's war of independence were trained. Most of the forays were only for the purpose of stealing cattle or burning cabins built in coveted regions; nevertheless, one of these expeditions changed the nationality of a territory larger than England. In 1801 the Rio Grandenses conquered the Seven Missions, thus doubling at a single stroke the area of their own state and reducing Uruguay to substantially its present dimensions.

As the seat of the largest Spanish garrison, Montevideo naturally became the centre of pro-Spanish feeling and influence in the Plate and the home of families who boasted distinguished Castilian descent and conservative principles. In the interior settlements Creole influences predominated, and the population was substantially homogeneous with that of the Argentine provinces on the other side of the Uruguay River. Between the aristocratic Montevideans and the gauchos of the country districts there was little sympathy.

In 1806, the English captured Buenos Aires, and many Spanish officials and officers fled to Montevideo for refuge. The garrison of Montevideo furnished troops and arms for the expedition which soon went across the Plate and triumphantly recaptured Buenos Aires. Late that same year, British troops from the Cape of Good Hope seized Maldonado harbour in eastern Uruguay. As soon as re-enforcements arrived a movement was made against Montevideo. On the 14th of January, 1807, the city was besieged by sea and land. The attacking and defending forces were about equal in number, although the British regulars were far superior in discipline and effectiveness to their opponents, half of whom were militia. A sortie in force was completely defeated, with a loss of one thousand men, and after eight days of bombardment the British effected a breach in the wall and took the town by assault, the Spaniards losing half their force and the remainder scattering. A great fleet of merchant vessels had accompanied the British expedition, and as soon as the town surrendered their goods were landed, and the English traders took possession of the shops almost as completely as the British soldiers did of the fortifications. Uruguay was opened up to free trade, the gauchos were soon selling their hides and horsehair for higher prices than they had ever received, and buying clothes, tools, and the comforts and luxuries of civilised life at rates they had never dreamed possible.

A few months later the English attacked Buenos Aires, but were overwhelmingly defeated, and the British general found himself in such an awkward situation that, in order to obtain permission to withdraw his army, he had to agree to evacuate Montevideo. The convention was carried out and the British soldiers left the Plate forever, but the British merchants remained behind. Although the English occupation of the city had lasted so short a time, it created an unwonted animation in Montevideo by the establishment of a great number of mercantile and industrial houses. From this time, Montevideo's commerce assumed greater proportions and it became a place of real commercial importance, as well as a military post. Both city and country had tasted the delights of commercial freedom, and material civilisation had received its first great impulse.

Elio, the Spanish military governor of Montevideo, suspected the loyalty of Liniers, the Frenchman, who, because he had led in the fighting against the English, had been created viceroy at Buenos Aires. Spanish affairs at home were in confusion and fast becoming worse confounded. The old king had abdicated in favour of his son; civil war had broken out on the Peninsula; the new king had been compelled by Napoleon to resign, and Joseph Bonaparte was proclaimed monarch of Spain. The Spanish nation refused to accept Joseph and a revolutionary government was set up in Seville. Elio, as a patriotic Spaniard, promptly swore allegiance to this junta, but the Viceroy and the Buenos Aires Creoles hesitated as to their course of action. The Montevidean governor and the Buenos Aires Viceroy quarrelled; the former accused the latter of unfaithfulness to Spain and disavowed his authority, and the latter retaliated by issuing a decree deposing Elio. On receiving news of this act, which was strictly legal under Spanish law, the Montevideo Cabildo met in extraordinary session and appointed a junta, which was to be dependent solely and directly upon the authority of the banished legitimate king and in no way upon Buenos Aires so long as Liniers remained Viceroy. Thus early did Montevideo act independently of Buenos Aires.

Although the sentiment of loyalty was much stronger in Montevideo than in Buenos Aires, the English invasion was no sooner over than there became manifest something of the same profound division between Creoles and Spaniards. Three years, however, passed without disturbances; and even when the news of the overthrow of the new Spanish Viceroy by the populace of Buenos Aires on the 25th of May, 1810, reached Montevideo, the governor was able to prevent any revolutionary manifestations of sympathy. On the 12th of July a small part of the garrison rose in a mutiny, which was easily suppressed. In January, 1811, Elio returned to Montevideo with a commission as Viceroy and bringing considerable re-enforcements. He declared war on Creole revolutionists at Buenos Aires and imprisoned the Montevideans suspected of Creole sympathies and revolutionary ideas.

Among those who escaped to Buenos Aires was one destined to be the founder of Uruguayan nationality. This was JosÉ Artigas, then captain of guerrilla cavalry. Although born in Montevideo he had lived the life of a gaucho from boyhood, and since 1797 had been a leader of the gaucho bands who were continually fighting the Rio Grandenses. He happened to be in Colonia on the occasion of Elio's declaration of war against the Creoles and at once fled to Buenos Aires. The junta there gave him a lieutenant-colonel's commission and some substantial help. The gauchos of the south-eastern part of Uruguay had meanwhile risen against the Spanish governor, and within a few weeks Artigas was back on Uruguayan soil at the head of a considerable force, while all around him bands of gauchos under other chiefs were preparing to resist the Spaniards. His bravery, energy, and good luck in the field, and his ruthless maintenance of discipline, gave him an ascendancy over all the others.

In April, 1811, Belgrano, the chief general of Buenos Aires, arrived with re-enforcements. Shortly after, a Spanish detachment, which had reached the western part of Uruguay, was captured, and the gaucho leaders advanced almost to the walls of Montevideo. A force of one thousand Spaniards started out to meet them and, on the 18th of May, met with complete defeat at the battle of Las Piedras. For this victory Artigas was promoted by the Buenos Aires Junta, and became the greatest military figure on the patriot side. With a considerable army of gauchos from both banks of the Uruguay and of patriots from Buenos Aires he began a siege of Montevideo.

The siege, however, did not last long. The great expedition sent by the patriots to Bolivia was overwhelmingly defeated in the battle of Huaqui, and the Buenos Aires Junta, horribly alarmed for their own safety, ordered all the troops under their control to return and help defend that city. At the same time a Portuguese army advanced from Brazil with the avowed purpose of saving Montevideo from being lost to Spain, but really to take possession of Uruguay for King John's own benefit. Artigas was compelled to retire to the Argentine, and Uruguayan historians say that on his long retreat to the Uruguay River he was accompanied by practically the whole rural population of the country. The semi-nomadic habits of the gauchos made such a migration easy, and they quickly found new homes on the opposite shore in Entre Rios, whence it would be easy to return as soon as the Portuguese troops retired.

Considerations of international politics and English pressure compelled King John to withdraw his troops from Uruguay in the middle of the year 1812, and the Buenos Aires government immediately began to assemble an army on the right bank of the Uruguay. Artigas was still encamped with his Uruguayan forces in the same neighbourhood, and although he held an Argentine commission he was virtually independent. The Argentine army, under the command of JosÉ Rondeau, who in colonial days had been captain of guerrillas alongside Artigas, advanced against Montevideo, and on the last day of 1812 won the bloody battle of Cerrito, in sight of the city, and shut the Spaniards up within its walls. Artigas followed and assisted in the siege, but he refused to unite his forces with those of Rondeau until his own claims should be recognised and his demands complied with. He assumed a dictatorship and sent delegates to Buenos Aires to advocate the formation of a federal republic, of which Buenos Aires was to be simply one member. Buenos Aires refused to receive his delegates, and civil war broke out. Rondeau adhered to the Buenos Aires interest; and after a year of disputes, in the beginning of January, 1814, Artigas withdrew his own followers from Montevideo, leaving the partisans of Buenos Aires to continue the siege alone. In May the celebrated Irish admiral, William Brown, destroyed the Spanish fleet, which had hitherto dominated the Plate. Montevideo's communications with both land and sea were shut off, and the fortress shortly afterwards surrendered to General Carlos Alvear, the Argentine general who was then commanding the besieging forces.

Meanwhile, Artigas had retired to the west, and the gauchos, not only of western Uruguay, but also of Entre Rios, Corrientes, the Missions, and Santa FÉ, rallied around his standard. Independent chiefs in these various provinces had been resisting the efforts of Buenos Aires to reduce them to obedience. Artigas was, in a way, recognised as their leader, but only as the greatest among equals. The conflict with the Buenos Aires party went on throughout the year 1814, and the federalists continually gained ground. In January, 1815, Fructuoso Rivera, one of the lieutenants of Artigas, defeated an Argentine force at the battle of Guayabos, and the Buenos Aires Junta was compelled to withdraw its troops from Montevideo.

This, however, did not amount to a separation of Uruguay from the Confederation. It only marked a triumph of the provinces in their efforts to prevent Buenos Aires from establishing a centralised government. Artigas had his friends in Entre Rios, Corrientes, the Missions, and Santa FÉ, and even as far as Cordoba; and Francia, dictator of Paraguay, was another of his allies in this struggle against Buenos Aires. However, he was nothing more than a military chief, without the capacity or even the desire of uniting these vast territories under a rational and stable government.

At the very height of his power he made the fatal mistake of embroiling himself with Brazil. In 1815 he invaded the territory of the Seven Missions, which the Rio Grandenses had conquered fourteen years before. The Portuguese king retaliated by sending a well-equipped army of several thousand men, and in October, 1816, the forces of Artigas were overwhelmed and driven with great slaughter from the disputed territory. Artigas made stupendous efforts to retrieve this loss, but the four thousand men which he assembled to resist the Portuguese army, which was now advancing upon Montevideo itself, were defeated and scattered in January, 1817. The Portuguese occupied Montevideo, and Artigas and his lieutenants, Rivera, Lavelleja, and Oribe, each of whom later became a great figure in the civil wars, retreated to the interior, where they maintained themselves for two years. After many defeats, Artigas himself lost the support of the chiefs of Entre Rios and Santa FÉ. He was finally driven out of Uruguay and attempted to establish himself in the Argentine provinces, only to be completely overwhelmed by his rivals. On the 23rd of September, 1820, he presented himself with forty men, all who remained faithful to him, at the Paraguayan town of Candelaria on the ParanÁ, begging hospitality of Francia. Francia granted him asylum, and this indomitable guerrilla chief, who for twenty-five years had kept the soil of Uruguay and of the Argentine mesopotamia soaked in blood, spent the rest of his life peacefully cultivating his garden in the depths of the Paraguayan forests. He died in 1850 at the age of eighty-six years; six years later his remains were brought from Paraguay to Montevideo and interred in the national pantheon. On the sarcophagus are engraved these words: "Artigas, Founder of the Uruguayan Nation."

Rivera was the last Uruguayan chief to lay down his arms before the Portuguese. When he surrendered, early in 1820, most of the other leaders had already given up and accepted service in the Portuguese army of occupation. In 1821, a Uruguayan Congress, selected for this purpose, declared the country incorporated with the Portuguese dominions under the name of the Cisplatine Province. For five years Montevideo and the country remained quiet under the Portuguese dominion, and Uruguay peacefully became a province of Brazil when that country declared her independence. The most celebrated chiefs of the civil war were officers in the Brazilian army, and few external signs of dissatisfaction were apparent. Underneath the surface, however, fermented a hatred of the foreign rule, and the proud Creoles only awaited an opportunity to revolt.