Portugal had long desired to secure the east bank of the River Plate (Río de la Plata) in South America, which it regarded the natural border of Brazil (the Portuguese Overseas Empire's largest and wealthiest colony).

Although Sacramento was only a few hours by ship from Spanish Buenos Aires, it was an outpost that was very isolated from Portugal's other possessions, requiring a two weeks sea voyage to reach the colony's capital at Rio de Janeiro.

In fact, the treaty had not assigned the east bank of the river to Portugal; the misconception was a result of a calculation error in determining the location of the demarcation line.

[7][8] To resolve the territorial contention, both nations signed the Treaty of Madrid in 1750, whereby Spain was granted control of Sacramento and Portugal was acknowledged as having jurisdiction over the Seven Missions (the western part of today's Brazilian state of Rio Grande do Sul).

Viceroy Baltasar Hidalgo de Cisneros was ousted in the May Revolution of 1810 and replaced by a junta (ruling council) formed by members of the native aristocracy who were of Spanish descent.

[20][21] Meanwhile, in Europe, Portugal was faced with imminent invasion by France and Spain, and the Portuguese royal family relocated to Rio de Janeiro, capital of Brazil.

While the local aristocrats sought to carve out semi-autonomous entities under Fernando VII's suzerainty, some of the more ambitious were looking forward to an eventual and complete break with the Spanish monarchy.

[30] Orientales, as the inhabitants of the Banda Oriental were called, led by José Gervasio Artigas, rebelled against Elío soon afterward and declared loyalty to the government in Buenos Aires.

The Spanish governor of Paraguay, Bernardo de Velasco y Huidobro, had asked for Portuguese troops, and the same request had been made by the small town of Mandisoví (present-day Federación) in the region of Entre Ríos.

[34] As a token of goodwill, Velasco named Diogo de Sousa governor of the Misiones region, with the day-to-day administration to be in the hands of a representative from Paraguay, Lieutenant Colonel Fulgencio Yegros.

Portugal's Spanish allies were unaware that Diogo de Sousa had already advocated conquest of the Banda Oriental to Prince Regent John, a plan that the latter already had in mind for some time.

Although the Portuguese were the first Europeans to discover the River Plate and the first to create a permanent settlement in what would later be known as the Banda Oriental, by this time most development activities had been carried out by the Spanish.

The second division comprised two infantry battalions, two horse artillery batteries from the Legion of São Paulo, one regiment of dragoons, one squadron of mounted militiamen from the town of Rio Pardo and one company of Guarani lancers.

[40][42] The two divisions were under the command of Diogo de Sousa (who had been promoted to Field Marshal), and together they formed the "Pacifying Army of the Banda Oriental" with a total of 3,000 men.

[46] The Portuguese lost one of its main allies on 9 June, after Velasco was ousted and arrested in a coup d'état that eventually resulted in the isolationist dictatorship of José Gaspar Rodríguez de Francia.

[A] Meanwhile, Spanish Lieutenant Colonel Joaquin de Paz, commanding officer of Melo in Banda Oriental, received orders to expel the village's inhabitants and burn it.

Paz was unwilling to obey and sent a letter to Diogo de Sousa requesting troops to garrison the town and prevent the orders for its destruction from being implemented.

[57][58][59][56] Around 2 September sixteen men who served under the orders of Captain Félix da Fonseca intercepted and defeated a force of 120 Hispanic-American soldiers coming from Curuzú Cuatiá.

[52] When Marques de Sousa and his men arrived on 5 September they discovered that the Oriental garrison had left, but not before they had burned the houses around the fortress, had placed mines and had expelled the civilian population.