The battle took place against a background of a long-running enmity between the Cuncos and Spanish, dating back to the destruction of Osorno in 1603.

The Battle of Río Bueno along with the subsequent events led to a political crisis among the Spanish in Chile, which involved a risk of civil war.

[6] There, the ship ran aground and while most of the crew managed to survive the wreck, nearby Cuncos killed them and took possession of the valuable cargo.

[7][8] Governor Acuña Cabrera was temporarily dissuaded from sending a punitive expedition from Boroa by Jesuit fathers Diego de Rosales and Juan de Moscoso who argued that the murders were committed by a few Indians and warned the governor that renewing warfare would dissipate the gains obtained at Boroa.

[8][9] Governor of Valdivia Diego González Montero [es] advanced south with his forces but soon found that tribes he expected to join him as allies were indifferent and even misled him with false rumours.

[8] While González Montero was away coastal Huilliches killed twelve Spanish and sent their heads to other Mapuche groups of southern Chile "as if they wanted to create a grand uprising" according to historian Diego Barros Arana.

[8] The expedition from Carelmapu led by Captain Ignacio Carrera Yturgoyen penetrated north to the vicinity of the ruins of Osorno where they were approached by Huilliches who handed over three "caciques", allegedly responsible for the murders.

[11] The Spanish expedition started from the fort of Nacimento in La Frontera with a force of 900 soldiers and 1500 Indian auxiliaries.

[2] The Mapuche-Huilliche had brought women and children with them, but they remained hidden in the forest, as did also most of the men, only the ones on horseback revealing themselves to the Spanish.

[2] Altogether, the Spanish lost a hundred professional soldiers and 200 auxiliaries in a battle where the actual fighting was very limited.