During the 16th century, the Protestant Reformation rapidly gained ground in northern Europe, especially in its Lutheran and Calvinist forms. Dutch Protestants, after initial repression, were tolerated by local authorities. By the 1560s, the Protestant community had become a significant influence in the Netherlands, although it clearly formed a minority then. In a society dependent on trade, freedom and tolerance were considered essential. Nevertheless, the Catholic rulers Charles V, and later Philip II, made it their mission to defeat Protestantism, which was considered a heresy by the Catholic Church and a threat to the stability of the whole hierarchical political system. On the other hand, the intensely moralistic Dutch Protestants insisted their Biblical theology, sincere piety and humble lifestyle was morally superior to the luxurious habits and superficial religiosity of the ecclesiastical nobility. The rulers' harsh punitive measures led to increasing grievances in the Netherlands, where the local governments had embarked on a course of peaceful coexistence. In the second half of the century, the situation escalated. Philip sent troops to crush the rebellion and make the Netherlands once more a Catholic region.

In the first wave of the Reformation, Lutheranism won over the elites in Antwerp and the South. The Spanish successfully suppressed it there, and Lutheranism only flourished in east Friesland. The second wave of the Reformation, came in the form of Anabaptism, that was popular among ordinary farmers in Holland and Friesland. Anabaptists were socially very radical and equalitarian; they believed that the apocalypse was very near. They refused to live the old way, and began new communities, creating considerable chaos. A prominent Dutch Anabaptist was Menno Simons, who initiated the Mennonite church. The movement was allowed in the north, but never grew to a large scale. The third wave of the Reformation, that ultimately proved to be permanent, was Calvinism. It arrived in the Netherlands in the 1540s, attracting both the elite and the common population, especially in Flanders. The Catholic Spanish responded with harsh persecution and introduced the Inquisition of the Netherlands. Calvinists rebelled. First there was the iconoclasm in 1566, which was the systematic destruction of statues of saints and other Catholic devotional depictions in churches. In 1566, William the Silent, a Calvinist, started the Eighty Years' War to liberate all Dutch of whatever religion from Catholic Spain. Blum says, "His patience, tolerance, determination, concern for his people, and belief in government by consent held the Dutch together and kept alive their spirit of revolt." The provinces of Holland and Zeeland, being mainly Calvinist by 1572, submitted to the rule of William. The other states remained almost entirely Catholic.