The conflict had two phases between 1899 and 1903, and ended with an Acrean victory and the subsequent Treaty of Petrópolis, which ceded Acre to Brazil.

The region of Acre possessed rich gold deposits and an abundance of timber, principally rubber trees.

Its population was composed of a small number of Indians without national identity[citation needed], and a handful of Brazilians and Bolivians.

On January 2, 1899, Bolivia set up a customs office in Puerto Alonso (today Porto Acre), which upset the Brazilian settlers, who wanted to oust the Bolivian authorities.

To prevent their return, the governor of Amazonas, José Cardoso Ramalho Junior, organized a team to enter Acre, commanded by Spaniard Luis Gálvez Rodríguez de Arias, who served as a Bolivian consul in Belém.

Carvalho Rodrigo became president of the newly declared Republic of Acre, whose forces had a light cannon, a machine gun, and about 200 men.

It was defeated by the Bolivian military, resulting in the loss of a dozen men and the machine gun, eventually leading to the republic's dissolution.

The company had some very influential shareholders, including the king of Belgium and relatives of William McKinley, then president of the United States.

The military, believing that it could profit from the border struggle, offered Castro to train and command 2000 tappers to fight the Bolivians.

The Brazilians, armed with Winchester rifles, low on ammunition, and suffering from tropical diseases and desertions, lost twenty men and were defeated.

The besieging force advanced towards the place where the rivers Chipamanu (also called Manuripe) and Tahuamanu meet to form the Rio Orton.

By said treaty Bolivia gave up Acre in exchange for Brazilian territory from the State of Mato Grosso, the payment of 2 million pounds (~ 640 million réis) and the promise to construct the Madeira-Mamoré Railroad; linking the Mamoré River and the Madeira River to allow the flow of regional production, particularly rubber.

Joaquim Francisco de Assis Brazil actively participated in the negotiations with Bolivia, representing the Brazilian government in its signature.

It is considered valid for all land titles issued by Bolivia or the state of Amazonas, defines the Portuguese language as official, and adopts the Brazilian monetary standard.

For the second time, Bolivia lost sparsely populated territory in its periphery to a militarily stronger and more centralized neighbor (the first was in the War of the Pacific).

Bolivia yielded an approximate area of 191,000 square kilometers, which mainly corresponds to the current state of Acre, Brazil.