Macau was officially founded in 1557 during the great era of Portuguese overseas exploration and it soon became the major trading post between Asia and Europe. As a result, several other colonial powers, notably the Dutch, made repeated attempts to conquer the province. During the early 17th century, when the Portuguese were fighting a protracted war of independence against the Spanish, the Dutch tried on no less than four occasions to gain control of Macau, but were repulsed each time.

In 1670, Macau was confirmed as a Portuguese possession by the Chinese. Macau went into decline as a regional trading centre from the early 19th century, when the British, the most recent colonial power in the region, began to settle along the Chinese coast and, in 1841, occupied the island of Hong Kong. This deep-water port attracted larger ships, and trade began to shift to the British Crown Colony.

In 1985, following the Hong Kong example, the Portuguese announced the opening of negotiations with Beijing on the transfer of sovereignty to the People's Republic of China. The final settlement, which was ratified in January 1988, provided for a handover in 1999, after which Macau would, like Hong Kong, become a 'Special Administrative Region' within China. This allows Macau to maintain a capitalist economy and a high degree of autonomy for a period of 50 years after 1999.

The return of Macau to China proceeded smoothly on 20 December 1999, with the appointment of Edmund Ho Hau-Wah to the post of Chief Executive, bringing to an end nearly 500 years of European colonial and territorial involvement and control in Asia.