Present-day Uruguay is settled by Charrua Indians and discovered by the Spanish explorer Juan Duaz de Solis in 1516. It last until 1624 that Spanish colonists found settlements, followed by Portuguese colonists in 1680. Portugal founds the Nova Colônia do Sacramento, which it holds until 1777. Spain founds in 1726 the city of San Filipe de Montevideo, which becomes a Spanish province in 1751. The area is since 1777 clearly under Spanish rule and is part of the Viceroyalty of La Plata. The independence of Uruguay in 1810 is disputed by both La Plata and Brazil: Brazil annexes the area in 1816 as the Province of Cisplatina. In 1825 a uprising against Brazil leads to the formal reincorporation into Río de la Plata.

When Brazil is defeated finally in 1828, Uruguay becomes independent as the State of Montevideo, named Oriental Republic of Uruguay since 1830. The country's hardwon independence is followed by protracted civil wars. The longest of these, the Guerra Grande (1839-1851), ends in the division of the country in two blocs, the ancestors of the two main political parties: the liberals of the Partido Colorado (Red Party, PC) and the conservatives of the Partido Nacional (National Party, PN). The remainder of the 19th century sees interventions by neighboring states, political and economic fluctuations as well as large inflows of immigrants, mostly from Europe.

In 1872 the parties agree to a peace treaty and Uruguay becomes a stable democracy until 1929. All governments between 1865 and 1958 are sincethen led by the PC presidents. Under the liberal president José Battle y Ordóñez of the Colorado Party (1903-1907 and 1911-1915) Uruguay becomes a wealthy state. He established widespread political, social and economic reforms such as a welfare program, government participation in many facets of the economy and a plural executive. The influence of Battle on Uruguayan society remains dominant. Both parties are divided in recognized factions (sublemas) with their own organization, which present lists of candidates at elections. At the elections the results of the sublemas are summated to the benefit of the party.

Battle is succeeded by Feliciano Alberto Viera Borges in 1915, Baltasar Brum Rodríguez in 1919, José Serrato Bergeróo in 1923, Juan Campisteguy Oxcoby in 1927 and Gabriel Terra Leivas in 1931. Due to the economic crisis of 1929 president Terra grabs power, abolishes parliament and instates a presidential constitution in 1934. In 1938 he is succeeded by Alfredo Baldomir Ferrari. He restores the power of parliament. Juan José de Amézaga Landaraso becomes president in 1943, Tomás Berreta Gandolfo in 1947 (he dies shortly after his inauguration), Luis Conrado Batlle Berres in 1947 and Andrés Martínez Trueba in 1951.

In 1951 the presidentschip is abolished and a presidential National Council of Government is formed in 1955. Until 1959 the PC holds the majority in the council, but that year the PN gets a majority. This lasts until 1967, when the presidency is restored. Óscar Diego Gestido Pose of the PC becomes president. After his death the same year he is succeeded by Jorge Pacheco Areco and in his turn 1972 by Juan María Bordaberry Arocena of the PC. Both belong to the right wing of the party. In this time guerillas fight the legal government and the government declares lawas cutailing civil liberties. In 1973 Bordaberry has to allow the imposure of martial law due to the emergence of communist guerilla and the army takes full power in 1976. It appoints Aparicio Méndez Manfredini of the PN as president, succeeded in 1981 by Gregorio Alvarez. The dictatorship ends in 1984 and Uruguay becomes a stable presidential democracy.

Colorado leader Julio María Sanguinetti Coirolo wins the presidency and serves from 1985 to 1990. The first Sanguinetti administration implements economic reforms and consolidates democracy following the country's years under military rule. The National Party's Luis Alberto Lacalle de Herrera wins the 1989 presidential election and serves from 1990 to 1995. In the 1994 elections, Sanguinetti wins a new term, which runs from 1995 until 2000. As no single party has a majority in parliament, the PN joins with the PC in a coalition government. Under a new electoral system Jorge Luis Batlle Ibañez of the PC is elected in the secound round with the support of the PN.