Hostilities were renewed in May 1500, when Ivan III took advantage of a planned Polish and Hungarian campaign against the Ottoman Empire. While preoccupied with the Ottomans, Poland and Hungary would not provide assistance to Lithuania. The pretext was the alleged religious intolerance to Orthodoxs in the Lithuanian court. Helena was forbidden by her father Ivan III to convert to Catholicism and that provided numerous opportunities for Ivan III, as defender of all Orthodox, to interfere in Lithuanian affairs and rally Orthodox believers.
The Muscovites promptly overran Lithuanian fortresses in Bryansk, Vyazma, Dorogobuzh, Toropets, Putyvl. Local nobles, particularly the Vorotynskys, often joined the Muscovite cause. Another attack came from southeast into Kiev Voivodeship, Volhynia, and Podolia. On July 14, 1500, the Lithuanians suffered a great defeat in the Battle of Vedrosha; Grand Hetman Konstanty Ostrogski was captured. The defeat was one of the reasons for the proposed Union of Mielnik between Poland and Lithuania. In November 1501, the Lithuanians were defeated again in the Battle of Mstislavl. The Crimean Tatars destroyed the Golden Horde, a Lithuanian ally, when its capital New Sarai was conquered in 1502.
In June 1501, John I Albert, King of Poland, died leaving his brother Alexander Jagiellon, Grand Duke of Lithuania, the strongest candidate for the Polish throne. Alexander became preoccupied with the succession. To counter religious accusations, Alexander attempted to establish a church union between Catholics and Orthodoxs as it was envisioned at the Council of Florence – the Orthodoxs would retain their traditions, but would accept the pope as their spiritual sovereign. Metropolitan of Kiev agreed to such an arrangement, but Helena protested. Polish nobles, including Bishop Erazm Ciolek and Cardinal Fryderyk Jagiellonczyk, discussed the issue of royal divorce.
In the meantime the war continued, just not as successfully for Muscovy. As Lithuanian forces arrived to the region, the Muscovite forces had to move slower. Additionally, the Livonian Order, led by Wolter von Plettenberg, joined the war as an ally of Lithuania. The Livonian troops won the Battle of the Siritsa River in August 1501, besieged Pskov, and won the Battle of Smolin in September 1502. In 1502, Ivan III organized a campaign to capture Smolensk, but the city withstood the siege as Muscovites chose poor strategy and did not have enough artillery. Peace negotiations began in mid-1502. Alexander asked Vladislaus II of Bohemia and Hungary to act as the mediator and a six-year truce was concluded on the Feast of the Annunciation (March 25) in 1503. The Grand Duchy of Lithuania lost approximately 210,000 square kilometres (81,000 sq mi) or a third of its territory: Chernihiv, Novhorod-Siverskyi, Starodub, lands around the upper Oka River. Russian historian Matvei Kuzmich Liubavskii counted Lithuanian losses at 70 volosts, 22 towns, and 13 villages. The Lithuanians also acknowledged Ivan's title sovereign of all Rus'.