Following the examples of the American and French revolutions, and with the mother countries distracted and weakened by the Napoleonic wars, liberation movements gained strength in the South American colonies of Spain. These included New Granada (Venezuela and Colombia), La Plata (Paraguay and Argentina), and Peru (Ecuador, Peru, Bolivia and Chile). With Spain occupied by the French army up to 1813, and weakened by by civil wars in the 1820s and 1830s, the Spanish government could give little direction to its colonies. In the Spanish colonies, city and local councils established their own independent ruling assemblies called "juntas". Paraguay was among the first of the colonies to become independent in 1811 under the dictator Jose Francia. When King Ferdinand VII attempted to restore order by military force, war broke out. The liberal upper classes, largely of pure Spanish background (called the "blancos" or whites) were forced to unite with the "colorados", mixed Spanish-Indian peasants, the majority of the population.

Leading the rebel armies are Simon Bolivar (1783-1830) and San Martin (1778-1850). Bolivar liberates Venezuela and Colombia between 1817 and 1820. In 1819, the republic of Gran Colombia is established with Bolivar as president. He then leads an army on an incredible and difficult march through the Andes, defeating the Spanish in Ecuador. Meanwhile, San Martin freed Argentina, and from here crossed the Andes during the winter of 1817-1818, liberating Chile. He pushed into Peru and defeated the Spanish here in 1821. Here he meets up with Bolivar, and the combined armies defeat the Spanish in two final battles in 1824, at Juni and Ayacucho. San Martin argues with Bolivar, and flees to France where he dies in exile. Bolivar's plan to create a "United States of South America" did not succeed.

After the death of Bolivar in 1830, Gran Colombia breaks up into the republics of Colombia (called New Granada until 1861), Venezuela and Ecuador. Southern Peru split off and became the republic of Bolivia in 1825. Many of the new states in South America were not stable. This was due in part to the chaos caused by the wars of liberation (all the fighting made it easy for military leaders to seize power), but also by interference from the United States of America and Great Britain. These countries wanted the former Spanish colonies to be disunited so it would be easier to exploit them economically. For example, in 1833, the British forced Argentina to give them the Falkland Islands. This gave Britain a military base near the strategic shipping routes around Cape Horn.

Brazil was the only South American colony to separate from its mother country, Portugal, without a war. Pedro, heir to the Portuguese throne, was raised in Brazil during the Napoleonic wars. After the defeat of Napoleon in 1814, he decided to stay in Brazil. A national council in 1822 declared Brazil an independent empire in 1822, with Pedro ruling as emperor. The territory of Uruguay had been annexed in 1817, but this led to war with Argentina. Peace was made in 1828 with Uruguay established as an independent republic. At this point, although some border changes would still be made, the current political make-up of South America was reached.