Only six weeks after his coronation, the Byzantine Emperor Manuel I Komnenos launched an expedition against Hungary, forcing the Hungarian lords to accept Ladislaus' rule.

[8][9] On hearing of Géza II's death, Emperor Manuel hastened towards Hungary, because he "put a high value on the overlordship" of the country, according to the Byzantine historian John Kinnamos.

[10][11] Another Byzantine historian, Niketas Choniates, wrote that the Emperor decided to support the young King's uncle and namesake, Stephen, to acquire the throne in the hope that "he might receive the undisputed and guaranteed possession" of Sirmium and Zimony (now Zemun in Serbia) from his protégé.

[10][9] Emperor Manuel dispatched an army to Hungary which advanced as far as Haram (now Ram, Serbia) where his envoys opened negotiations with the Hungarian barons.

[14] Bribed by the Byzantines and fearful of an invasion by the Emperor, the magnates agreed to accept Ladislaus, who was the older of the young King's two uncles, as a "compromise candidate".

[20] The young Stephen sought assistance from Vladislaus, King of Bohemia, against his uncle and the Byzantines, but the Bohemian barons refused to fight.

[21][22] The Emperor continued his campaign, but in short "realized that it was then impossible for" his protégé "to rule the Hungarians' land", and opened negotiations with Stephen III.

[23][24] According to their peace treaty, Emperor Manuel recognized the rule of the young Stephen, and the latter agreed to send his brother, Béla, to Constantinople.

[28] Stephen III also dispatched his envoys to Frederick, who decided not to intervene, but ordered his vassals—the King of Bohemia, the Duke of Austria, and the Margrave of Styria—to keep an eye on the political situation in Hungary.

[33][34] Accompanied by the forces of King Vladislaus of Bohemia, and auxiliary troops from Austria and Halych, Stephen III launched a campaign against him.

[35] Emperor Manuel I, who was about to march against Armenian Cilicia, returned to the Danube and stormed into Hungary, advancing as far as Bács (now Bač, Serbia).

[37] Abandoned by his most important ally, Stephen III was obliged to renounce Sirmium in favor of the Byzantine Empire, but only after the Emperor promised that he would never support his uncle.

If you oppose the marriage, and something else seems right to you in regard to it, know that we abstain from constraining you further.In short, Stephen III invaded Dalmatia, although he had pledged to Vitale II Michiel, Doge of Venice, that he would withdraw from the Dalmatian towns.

[42] An army under the command of Emperor Manuel I laid siege to Zimony and recaptured it; another Byzantine force invaded and occupied Bosnia and Dalmatia.

[42][44] [Stephen] sent envoys to the emperor, men of the aristocracy and one who enjoyed the office of bishop, and agreed to render [Sirmium] again to the Romans, and in addition the whole of Dalmatia.

[46][49] The Byzantine campaign caused great devastation in the eastern territories of the Kingdom of Hungary, forcing Stephen III to seek reconciliation.

[50][51] Stephen confirmed estates in Biograd na Moru and the privileges of Šibenik in 1166 and 1167, respectively, proving that the two towns accepted his suzerainty after the campaign.

[53][50] The contemporaneous Rahewin writes that Stephen III "made war on the emperor of the Greeks" because he had received and assisted his brother, Béla.

[56] However, the Byzantine army led by Andronikos Kontostephanos annihilated the Hungarians, who were under the command of Ispán Denis, in a decisive battle which was fought near Zimony on 8 July.

[61][62] The correspondence of Thomas Becket and John of Salisbury reveals that the principles of the Gregorian Reform were not fully introduced in Hungary "on account of the unbridled acts of tyranny by the seculars against the apostolic institutions" in the late 1160s.

[62] Pope Alexander III sent his legate Cardinal Manfred to Hungary in 1169, who discussed the debated issues with the king, the queen mother, and the prelates.

[61] According to historians Ferenc Makk and Pál Engel, Stephen III granted special privileges to the Walloon settlers of Székesfehérvár, including their exemption of customs duties throughout the kingdom.

[64][68] Arnold of Lübeck, who was in Hungary at that time, wrote that a rumor spreading in the country attributed the 25-year-old monarch's unexpected death to poisoning.