Spain and Portugal sign the Treaty of Tordesillas which divides the New World between the two countries.

Spain, or the Kingdom of Spain, is a country in Southern and Western Europe with territories in North Africa. Featuring the southernmost point of continental Europe, it is the largest country in Southern Europe and the fourth-most populous European Union member state. Spanning across the majority of the Iberian Peninsula, its territory also includes the Canary Islands, in the Eastern Atlantic Ocean, the Balearic Islands, in the Western Mediterranean Sea, and the autonomous cities of Ceuta and Melilla, in mainland Africa. Peninsular Spain is bordered to the north by France, Andorra, and the Bay of Biscay; to the east and south by the Mediterranean Sea and Gibraltar; and to the west by Portugal and the Atlantic Ocean. Spain's capital and largest city is Madrid, and other major urban areas include Barcelona, Valencia, Seville, Zaragoza, Málaga, Murcia, and Palma de Mallorca.

Portugal, officially the Portuguese Republic, is a country on the Iberian Peninsula in Southwestern Europe. Featuring the westernmost point in continental Europe, Portugal borders Spain to its north and east, with which it shares the longest uninterrupted border in the European Union; to the south and the west is the North Atlantic Ocean; and to the west and southwest lie the Macaronesian archipelagos of the Azores and Madeira, which are the two autonomous regions of Portugal. Lisbon is the capital and largest city, followed by Porto, which is the only other metropolitan area.

The Treaty of Tordesillas, signed in Tordesillas, Spain, on 7 June 1494, and ratified in Setúbal, Portugal, divided the newly discovered lands outside Europe between the Kingdom of Portugal and the Crown of Castile, along a meridian 370 leagues or 2,100 kilometres (1,300 mi) west of the Cape Verde islands, off the west coast of Africa. That line of demarcation was about halfway between Cape Verde and the islands visited by Christopher Columbus on his first voyage, named in the treaty as Cipangu and Antillia.