Present-day Peru is settled by Quechua and Aymara between the fifth and eight century. In 1438 the Quechua found the Inca Empire, including large parts of South America. The Inca Empire is a highly civilized absolute monarchy. In 1527 the Spanish conquistador Francisco Pizarro discovers the Inca Empire. The Spanish capture the Incan capital at Cuzco by 1533 and consolidated their control by 1542. Spain founds in 1544 the Viceroyalty of Peru, including also large parts of South America.

Peru's independence movement is by Jose de San Martin of Argentina and Simon Bolivar of Venezuela. San Martin proclaims Peruvian independence from Spain in 1821 as a federal state existing out of Peru and Upper Peru. Since 1822 the country is named Peruvian Republic. Spain is defeated in 1824. In 1825 Upper Peru secedes as Bolivia. Peru is led by the white landowning class. The first president is José de San Martín.

In 1836 Andrés de Santa Cruz, president of Bolivia, launched a project to confederate Peru and Bolivia under his "Protectorship." Both the South-Peruvian State and the North-Peruvian State are proclaimed, in each case de Santa Cruz is state's "Supreme Protector" with full powers. The Peru-Bolivian Confederation is proclaimed 1836. The confederation lasts until 1839. As most South-American states Peru is a weak and unstable state, ruled by a succesion of military dictators for most of the 19th century. Chile's victory over Peru and Bolivia in the War of the Pacific (1879-83) result in a territorial settlement. Between 1881 and 1883 Peru is occupied and it has to secede the province of Tarapacá to Chile. The first civilian president takes office in 1895: José Nicolás Baltasar Fernández de Piérola y Villena of the Partido Democratico (Democratic Party, PD). Between 1899 and 1908 the Partido Civilista (Civilista Party, PC) rules with presidents Eduardo López de Romaña y Alvizuri (1899-1903), Manuel González de Candamo Iriarte (1903-1904) and José Simón Pardo y Barreda (1904-1908). Between 1908 and 1912 Augusto Bernardino Leguía y Salcedo of the Partido Democratico Reformista (Democratic Reformist Party, PDR) is president, succeeded in 1912 by Guillermo E. Billinghurst Angulo of the PD. In 1914 the army under Óscar Raymundo Benavides Larrea takes power again, but in 1915 the PC returns to power with president José Simón Pardo y Barreda. In 1919 Leguía resumes office until 1930. 1930 brings a military coup. This leads in 1931 to the presidency of Luis Miguel Sánchez Cerro of the Union Revolucionario (Revolutionary Union) and in 1933 to the presidency of Óscar Raymundo Benavides Larrea.

Civilian rule is restoreed in 1939 when Manuel Prado y Ugarteche of the Coalicion Conservadora (Conservative Coalition) becomes president, succeeded in 1945 by José Luis Bustamante y Rivero of the social democratic Frente Democratico Nacional (National Dmocration Front, FDN). The army seizes power again in 1948: general Manuel Arturo Odría Amoretti takes power. He establishes the Partido Restaurador del Perú (Peruvian Restoration Party, PRP). He becomes president in 1950 and rules the country until 1956. He establishes that year the conservative Manuel Prado y Ugarteche of the Movimiento Democrático de Pradista (Pradista Democratic Movement, MDP) is elected president. In 1962 Haya de la Torre of the social-democratic Alianza Popular Revolucionaria Americana "Aprista" (American Revolutionary People's Alliance, APRA) is elected president, but the army takes power en new elections are held in 1963. Fernando Belaúnde Terry of the Acción Popular (People's Action, AP) wins these elections and becomes president.

In 1968 the left wing factions of the army takes power again and general Juan Velasco Alvarado becomes president in a revolutionary government. As part of what is called the "first phase" of the military government's nationalist program, Velasco undertakes an extensive agrarian reform program and nationalizes the fishmeal industry, some petroleum companies and several banks and mining firms. Because of Velasco's economic mismanagement and deteriorating health, he is replaced by Francisco Morales Bermudez Cerruti in 1975. Morales Bermudez moves the revolution into a more pragmatic "second phase," tempering the authoritarian abuses of the first phase and beginning the task of restoring the country's economy. Morales Bermudez presides over the return to civilian government in accordance with a new constitution drawn up in 1979.

In 1980 Belaúnde Terry is returned to office by an impressive plurality and Peru remains a presidential democracy until now. During the 1980s, cultivation of illicit coca is established in large areas on the eastern Andean slope. Rural terrorism by Sendero Luminoso (SL) and the Tupac Amaru Revolutionary Movement (MRTA) increase during this time and derive significant financial support from alliances with the narcotraffickers. In 1985 the American Popular Revolutionary Alliance (APRA) wins the elections, bringing Alan Garcia Perez to office. Economic mismanagement by the Garcia administration leads to hyperinflation from 1988 to 1990. Concerned about the economy, the increasing terrorist threat from Sendero Luminoso and allegations of official corruption, voters chose a relatively unknown mathematician-turned-politician, Alberto Fujimori, as president in 1990. Fujimori implements drastic orthodox measures that cause inflation to drop from 7,650% in 1990 to 139% in 1991. Faced with opposition to his reform efforts, Fujimori dissolves parliament in the "auto-coup" of 1992. He then revises the constitution, calls new parliamentary elections and implements substantial economic reform, including privatization of numerous state-owned companies, creation of a more investment-friendly climat, and much improved management of the economy. 2000 brings political and economic turmoil. Fujimori flees the country and resigns from office in 2000. New free and fair elections in 2001 lead to the victory of Alejandro Toledo of Perú Posible (Possible Peru, PP). The Toledo government restores a high degree of democracy to Peru following the authoritarianism and corruption of the Fujimori years.