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The Brazilian Indians never developed a centralized civilization like the Inca or Maya, and left very little evidence for archaeologists to study: some pottery, shell mounds and skeletons. The Indian population was quite diverse and there were an estimated two to five 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, ostensibly for India, and arrived on the Brazilian coast 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 12 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, solving the prodigious labor requirements by enslaving the Indian population. The capture and sale of slaves almost became Brazil's most lucrative trade, and was dominated by the bandeirantes, men from São Paulo 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 exploits, more than any treaty, secured the huge interior of South America for Portuguese Brazil.

During the 17th century, African slaves replaced Indians on the plantations. They were less vulnerable to European diseases but they strongly resisted slavery. 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 which 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 set sail for Brazil. On arrival, 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, 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 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.

In 1929, the global economic crisis weakened the coffee planters' hold on the government and an opposition Liberal Alliance was formed with the support of nationalist military officers. When the Alliance lost elections in 1930, the military seized power on their behalf and installed the Liberal leader, Getúlio Vargas, as president. Vargas, whose regime was inspired by Mussolini's and Salazar's fascist states, dominated the political scene for the next 30 years, until he was forced out of office in 1954. His replacement, Juscelino Kubitschek, was the first of Brazil's big spenders; he built Brasília, the new capital, which was supposed to catalyze the development of the interior. By the early 1960s, the economy was battered by inflation, partly because of the expense of building the new capital, and fears of encroaching communism were fueled by Castro's victory in Cuba. Again, Brazil's fragile democracy was squashed by a military coup.

In the mid-1980s, Brazil's economic miracle, supported largely by loans from international banks, petered out and the military handed power back to a civilian government. In November 1989, Brazilians had their first opportunity to elect a president by popular vote in almost 30 years, and elected Fernando Collor de Mello, ex-karate champion, over the socialist Luiz da Silva, by a narrow but secure majority. Collor gained office promising to fight corruption and reduce inflation, but by the end of 1992, the man who had once reminded George Bush of Indiana Jones had been removed from office and was being indicted on charges of corruption - accused of leading a gang which used extortion and bribery to suck more than US$1 billion from the economy.

Vice President Itamar Franco became president in December 1992 on Collor's resignation, and in November 1994, Fernando Cardoso was elected president. Cardoso has reduced the inflation rate significantly since taking office, but this has been offset by the loss of two million jobs between 1989-96 and ongoing problems with agrarian reform - now being treated as a national security issue. According to a 1996 United Nations report, Brazil has the world's most unequal distribution of wealth. Still, that didn't stop Cardoso from comfortably winning a second four-year term in 1998.