In the following decades, Portugal created the conditions that would make it the pioneer in the exploration of the world. On July 25, 1415, the Portuguese Empire began when a Portuguese fleet, with King John I and his sons Duarte, Pedro, Henry the Navigator, and Afonso, along with the Portuguese supreme constable Nuno Álvares Pereira departed to besiege and conquer Ceuta in North Africa, a rich Islamic trade center. On August 21, the city fell.

In 1418 two captains of Prince Henry the Navigator, were driven by a storm to an island which they called Porto Santo, or Holy Port, in gratitude for their rescue from the shipwreck. Also in early 15th century, Madeira Island and the Azorean islands were discovered. Henry the Navigator's interest in exploration, together with some technological developments in navigation, made Portugal's expansion possible and led to great advances in geographic knowledge. The discoveries were financed by the wealth of the Order of Christ, an order founded by King Denis for the Templar knights, who found refuge in Portugal after being pursued all over Europe. The Templars had their own objective, finding the lost Christian Kingdom of Prester John.

In 1434, Gil Eanes rounded Cape Bojador, south of Morocco. The trip marked the beginning of the Portuguese exploration of Africa. Before this voyage very little information was known in Europe about what lay beyond it. At the end of the 13th and the beginning of the 14th centuries, those who tried to venture there became lost, giving birth to legends of sea monsters. Fourteen years later, on a small island known as Arguim off the coast of Mauritania a castle was built, working as a feitoria (a trading post) for commerce with inland Africa thus, circumventing the Arab caravans that crossed the Sahara. Some time later, the caravels explored the Gulf of Guinea, leading to the discovery of several uninhabited islands and reaching the Congo River.

A remarkable achievement was the rounding of the Cape of Good Hope by Bartholomew Dias in 1487. By then the spices of India were nearby, hence the name of the cape. In the last decade of the 15th century, Pêro de Barcelos and João Fernandes Lavrador explored North America , Pêro da Covilhã reached Ethiopia, searching for the mythical kingdom of Prester John, and Vasco da Gama sailed to India. In 1500, Pedro Álvares Cabral landed on the Brazilian coast. Ten years later, Alfonso d'Albuquerque conquered Goa, in India.

In 1578, a very young King Sebastian died in battle, leaving no heir. Because Philip II of Spain was the son of a Portuguese princess, the Spanish ruler became Philip I of Portugal in 1581. Some men claimed to be King Sebastian between 1584 and 1598, originating the Sebastian myth. Portugal formaly maintained its independent law, currency, colonies, and government, under a personal union between Portugal and Spain. New empires had emerged and started to assault the Portuguese Empire. The third Spanish king, Philip III tried to further enforce integration, openly attacking the Portuguese nobility that was not in his favour. In December 1, 1640, the Duke of Bragança, of the Portuguese Royal Family, John IV, was acclaimed after a revolutionary turmoil, and a Restoration War was fought for a few more years.