The region that would become Portugal was settled by the Celts around 700 B.C.E. It soon attracted a succession of peoples and was colonised in turn by the Phoenicians, Greeks, Romans and Visigoths. The Moors crossed the Strait of Gibraltar in the eighth century and commenced a long occupation over much of the Iberian Peninsula. They introduced their culture, architecture, and agricultural techniques to the region until Christian resistance grew into the Reconquista that finally ejected the Moors in the twelfth century.

Portugal was born from this struggle to reconquer Iberia from the Moors. Young aristocrats from all over Europe went to Iberia to battle the Moors and while reconquering the peninsula for the Christian kings, they won hereditary titles and land grants for themselves. It was Henry, a son of the Duke of Burgundy, who fought as a vassal for the king for Navarre and was rewarded with a principality and the title of Count of Portucale in the eleventh century. It was his son, Afonso Henriques (1128-1185), seeking independence from the Crown of Navarre, who petitioned and won from the pope the title of King of Portugal.

King Afonso Henriques had a primitive navy that was involved in constant skirmishes with Moorish vessels in the Strait of Gibraltar. His successor, Sancho I, continued the kingdom's naval expansion when he contributed forty galleys, gallots, and other vessels to a crusading fleet in 1189. Under Diniz (1261-1325), Portugal's greatest medieval king, both the royal and mercantile marine developed considerably. Portuguese vessels sailed to France, Normandy, England, Spain, and the Mediterranean. King Diniz had a pine forest planted near Leiria to supply wood for ship building and encouraged the industry by conferring the privilege of knighthood upon its officers and artisans. He kept a regular fleet to guard against coastal pirates and was the first Portuguese monarch to establish a permanent and hereditary office of Admiral. In 1317 a famous Genoese noble, Manoel Pessanha, was the first to be appointed to that office. Pessanha brought to Portugal several leading Genoese families who became, over time, major influences on Portugal's era of overseas expansion. Passanha's son inherited his father's office of Admiral and was soon joined by two more admirals under King Afonso IV, indicating the ongoing enlargement of the royal fleet.

Under King Ferdinand I the Handsome (1345-1383), the Portuguese fleets began carrying artillery during Portugal's alliance with Castile against Aragon in 1359 and 1364. King Ferdinand I also granted a Letter of Privileges in 1377 that encouraged the growth of the mercantile marine. This was a turning point for Portuguese maritime history because a shipping company was created to promote overseas commerce, all the while insuring the availability of merchant vessels for the Crown during times of war. The Portuguese navy went on to suffer numerous losses in King Ferdinand I's various conflicts, which left it in a precarious state during the succession crisis that followed the king's death in 1383. His half brother, D. Joăo, Master of the Military Order of Avis, stepped into the role of regent during this succession crisis, which motivated Castile's King Juan to invade Portugal.

King Juan's army laid siege to Lisbon in 1384 but had to disengage after suffering heavy causalities.