In contrast to the Inca and Maya, the Brazilian Indians never developed a centralized civilization. Assisted by the jungle and climate, they left very little evidence for archaeologists to study: just some pottery, shell mounds and skeletons. The Indian population was quite diverse and there were an estimated two to six million living in the territory that is now Brazil when the Portuguese first arrived. Today there are fewer than 200,000, most of them in the hidden jungles of the Brazilian interior.

In 1500 Pedro Alvares Cabral set sail from Lisbon with 13 ships and 1200 crew, ostensibly for India, and arrived on the Brazilian coast near present-day Porto Seguro by 'accident'. Some historians say it was his intended destination all along, and it's true that his 'discovery' was reported to the king in such matter-of-fact terms that it seems that the existence of Brazil was already well-known to mariners. In 1531 King João III of Portugal sent the first settlers to Brazil and, in 1534, fearing the ambitions of other European countries, he divided the coast into 15 hereditary captaincies, which were given to friends of the Crown.

The colonists soon discovered that the land and climate were ideal for growing sugar cane, and solved the prodigious labor requirements by enslaving the Indian population, despite their resistance. The capture and sale of slaves soon became one of Brazil's most lucrative trades, and was dominated by the bandeirantes, men from São Paulo usually born of Indian mothers and Portuguese fathers. They hunted the Indians into the interior, and by the mid-1600s had reached the peaks of the Peruvian Andes. Their brutal exploits, more than any treaty, secured the huge interior of South America for Portuguese Brazil.

From the mid-16th century, and particularly during the 17th century, African slaves, despite their resistance, replaced Indians on the plantations. They were less vulnerable to European diseases, but their lives were short regardless. Quilombos, communities of runaway slaves, were common throughout the colonial era. They ranged from mocambos, small groups hidden in the forests, to the great republic of Palmares that survived for much of the 17th century. In the 1690s, gold was discovered in Minas Gerais and the rush was on. Brazilians and Portuguese flooded into the territory and countless slaves were brought from Africa to dig and die in the mines.

In 1807, Napoleon's army marched on Lisbon. Two days before the invasion, the Portuguese Prince Regent, later to become Dom João VI, set sail for Brazil. Soon after arriving, he made Rio de Janeiro the capital of the United Kingdom of Portugal, Brazil and the Algarve; Brazil became the only New World colony to serve as the seat of a European monarch. In 1822 the Prince Regent's son, Pedro, who had been left behind to rule the colony when his father returned to Portugal, pulled out his sword and yelled the battle cry 'Independência ou morte!' (independence or death). Portugal was too weak to fight its favorite son, so Brazil became an independent empire without spilling a drop of blood.

During the 19th century, coffee replaced sugar as Brazil's major export. At first the coffee plantations used slave labor, but with the abolition of slavery in 1888, thousands of European immigrants, mostly Italians, poured in to work on the coffee estates, called fazendas. In 1889, a military coup, supported by the powerful coffee aristocracy, toppled the Brazilian Empire, and for the next 40 years, Brazil was governed by a series of military and civilian presidents supervised, in effect, by the armed forces.