The growth of Portuguese interests in the Americas was slow, the king being absorbed with establishing Portuguese hegemony in Asia. In addition, the Treaty of Tordesillas of 1494, arranged by Pope Alexander VI, divided the unexplored world between Spain and Portugal and forbade Portugal from exploring beyond a meridian drawn 1,600 kilometers miles west of the Cape Verde Islands. In 1502 Fernão Noronha was given a three-year commercial monopoly on dyewood in return for exploring 300 leagues (about 1,500 kilometers) of the Brazilian coast each year. During the last years of Manuel I's reign, the first colonists were sent to Brazil to establish a sugar industry. Additional colonists were sent during the reign of João III, and, in 1530, Martim Afonso de Sousa was named major captain of Brazil and invested with the power to distribute land among captains or donatários, much as had been done in Madeira when it was colonized a century before. These captaincies were large strips of land that extended from the coast into the interior. The captains settled colonists in their respective captaincies and were required to provide them protection and justice.

As the captaincies were independent of one another, they were unable to defend themselves from foreign pirates. Consequently, João III appointed a governor general with authority over the captaincies. The first governor general, Tomé de Sousa, was appointed in 1549 and established his capital at São Salvador da Baía. He defeated French pirates in a naval engagement in the bay of Rio de Janeiro. Intensified colonization under de Sousa began in the form of coastal settlements and spread to the interior. The colonists cultivated indigenous crops, especially manioc, and introduced new ones such as wheat, rice, grapes, oranges, and sugarcane from Madeira and São Tomé. Sugar soon became Brazil's most important export.

Data as of January 1993