In September 1821, the Côrtes, with only a portion of the Brazilian delegates present, voted to abolish the Kingdom of Brazil and the royal agencies in Rio de Janeiro and to make all the provinces subordinate directly to Lisbon. Portugal sent troops to Brazil and placed all Brazilian units under Portuguese command. In January 1822, tension between Portuguese troops and the Luso-Brazilians (Brazilians born in Portugal) turned violent when Pedro accepted petitions from Brazilian towns begging him to refuse the Côrtes's order to return to Lisbon. Responding to their pressure and to the argument that his departure and the dismantling of the central government would trigger separatist movements, he vowed to stay. The Portuguese "lead feet," as the Brazilians called the troops, rioted before concentrating their forces on Cerro Castello, which was soon surrounded by thousands of armed Brazilians. Dom Pedro "dismissed" the Portuguese commanding general and ordered him to remove his soldiers across the bay to Niteroi, where they awaited transport to Portugal. Pedro formed a new government headed by José Bonifácio de Andrada e Silva of São Paulo. This former royal official and professor of science at Coimbra was crucial to the subsequent direction of events and is regarded as one of the formative figures of Brazilian nationalism, indeed, as the patriarch of independence.

The atmosphere was so charged that Dom Pedro sought assurances of asylum on a British ship in case he lost the looming confrontation; he also sent his family to safety out of the city. In the following days, the Portuguese commander delayed embarcation, hoping that expected reinforcements would arrive. However, the reinforcements that arrived off Rio de Janeiro on March 5, 1822, were not allowed to land. Instead, they were given supplies for the voyage back to Portugal. This round had been won without bloodshed.

Blood had been shed in Recife in the Province of Pernambuco, when the Portuguese garrison there had been forced to depart in November 1821. In mid-February 1822, Bahians revolted against the Portuguese forces there but were driven into the countryside, where they began guerrilla operations, signaling that the struggle in the north would not be without loss of life and property. To secure Minas Gerais and São Paulo, where there were no Portuguese troops but where there were doubts about independence, Dom Pedro engaged in some royal populism.

Towns in Minas Gerais had expressed their loyalty at the time of Pedro's vow to remain, save for the junta in Ouro Prêto, the provincial capital. Pedro realized that unless Minas Gerais were solidly with him, he would be unable to broaden his authority to other provinces. With only a few companions and no ceremony or pomp, Pedro plunged into Minas Gerais on horseback in late March 1822, receiving enthusiastic welcomes and allegiances everywhere. Back in Rio de Janeiro on May 13, he proclaimed himself the "perpetual defender of Brazil" and shortly thereafter called a Constituent Assembly (Assembléia Constituinte) for the next year. To deepen his base of support, he joined the freemasons, who, led by José Bonifácio Andrada e Silva, were pressing for parliamentary government and independence. More confident, in early August he called on the Brazilian deputies in Lisbon to return, decreed that Portuguese forces in Brazil should be treated as enemies, and issued a manifesto to "friendly nations." The manifeso read like a declaration of independence.

Seeking to duplicate his triumph in Minas Gerais, Pedro rode to São Paulo in August to assure himself of support there and began a disastrous affair with Domitila de Castro that would later weaken his government. Returning from an excursion to Santos, Pedro received messages from his wife and from Andrada e Silva that the Côrtes considered his government traitorous and was dispatching more troops. In a famous scene at Ipiranga on September 7, 1822, he had to choose between returning to Portugal in disgrace or opting for independence. He tore the Portuguese blue and white insignia from his uniform, drew his sword, and swore: "By my blood, by my honor, and by God: I will make Brazil free." Their motto, he said, would be "Independence or Death!"

Pedro's government employed Admiral Thomas Alexander Cochrane, one of Britain's most successful naval commanders in the Napoleonic Wars and recently commander of the Chilean naval forces against Spain. Pedro's government also hired a number of Admiral Cochrane's officers and French General Pierre Labatut, who had fought in Colombia. These men were to lead the fight to drive the Portuguese out of Bahia, Maranhão, and Pará, and to force those areas to replace Lisbon's rule with that of Rio de Janeiro. Money from customs at Rio de Janeiro's port and local donations outfitted the army and the nine-vessel fleet. The use of foreign mercenaries brought needed military skills. The much-feared Cochrane secured Maranhão with a single warship, despite the Portuguese military's attempt to disrupt the economy and society with a scorched-earth campaign and with promises of freedom for the slaves. By mid-1823 the contending forces numbered between 10,000 and 20,000 Portuguese, some of whom were veterans of the Napoleonic Wars, versus 12,000 to 14,000 Brazilians, mostly in militia units from the Northeast.

Some historians have erred in supporting historian Manuel de Oliveira Lima's contention that independence came without bloodshed. In fact, although both sides avoided massive set battles, they did engage in guerrilla tactics, demonstrations, and countermoves. There is little information on casualties, but the fighting provided a female martyr in Mother Joana Angélica, who was bayoneted to death by Portuguese troops invading her convent in Bahia; and an example of female grit in Maria Quitéria de Jesus, who, masquerading as a man, joined the imperial army and achieved distinction in several battles.

Britain and Portugal recognized Brazilian independence by signing a treaty on August 29, 1825. Until then, the Brazilians feared that Portugal would resume its attack. Portuguese retribution, however, came in a financial form. Secret codicils of the treaty with Portugal required that Brazil assume payment of 1.4 million pounds sterling owed to Britain and indemnify Dom João VI and other Portuguese for losses totaling 600,000 pounds sterling. Brazil also renounced future annexation of Portuguese African colonies, and in a side treaty with Britain promised to end the slave trade. Neither of these measures pleased the slave-holding planters.