The discovery of new maritime trade routes by Western European states allowed them to avoid the Ottoman trade monopoly. After the voyages of Vasco da Gama, a powerful Portuguese Navy took control of the Indian Ocean in the early 16th century. It threatened the coastal cities of the Arabian Peninsula and India. The Portuguese discovery of the Cape of Good Hope in 1488 initiated a series of Ottoman-Portuguese naval wars in the Indian Ocean throughout the 16th century.

Ottoman control of the Red Sea meanwhile began in 1517 when Selim I annexed Egypt to the Ottoman Empire after the Battle of Ridaniya. Most of the habitable zone of the Arabian Peninsula (Hejaz and Tihamah) soon fell voluntarily to the Ottomans. Piri Reis, who was famous for his World Map, presented it to Selim just a few weeks after the sultan arrived in Egypt. The portion concerning the Indian Ocean is missing; it is argued that Selim may have taken it, so that he could make more use of it in planning future military expeditions in that direction. In fact, after the Ottoman domination in the Red Sea, the Ottoman-Portuguese rivalry began.

In 1525, during the reign of Suleiman I (Selim's son), Selman Reis, a former corsair, was appointed as the admiral of a small Ottoman fleet in the Red Sea which was tasked with defending Ottoman coastal towns against Portuguese attacks. In 1534, Suleiman annexed most of Iraq and by 1538 the Ottomans had reached Basra on the Persian Gulf. The Ottoman Empire still faced the problem of Portuguese controlled coasts. Most coastal towns on the Arabian Peninsula were either Portuguese ports or Portuguese vassals. Another reason for Ottoman-Portugal rivalry was economic. In the 15th century, the main trade routes from the Far East to Europe, the so-called spice route, was via the Red Sea and Egypt. But after Africa was circumnavigated the trade income was decreasing.^[21] While the Ottoman Empire was a major sea power in the Mediterranean, it was not possible to transfer the Ottoman Navy to the Red Sea. So a new fleet was built in Suez and named the "Indian fleet".The apparent reason of the expeditions in the Indian Ocean, nonetheless, was an invitation from India.

This war took place upon the backdrop of the Ethiopian–Adal War. Ethiopia had been invaded in 1529 by the Ottoman Empire and local allies. Portuguese help, which was first requested by Emperor Dawit II in 1520, finally arrived in Massawa during the reign of Emperor Galawdewos. The force was led by Cristóvão da Gama (second son of Vasco da Gama) and included 400 musketeers, several breech-loading field guns, and a few Portuguese cavalrymen as well as a number of artisans and other non-combatants.

The original Ottoman goals of checking Portuguese domination in the ocean and assisting Muslim Indian lords were not achieved. This was in spite of what an author has called "overwhelming advantages over Portugal", as the Ottoman Empire was wealthier and much more populous than Portugal, professed the same religion as most coastal populations of the Indian Ocean basin and its naval bases were closer to the theater of operations.

Despite the growing European presence in the Indian Ocean, Ottoman trade with the east continued to flourish. Cairo, in particular, benefitted from the rise of Yemeni coffee as a popular consumer commodity. As coffeehouses appeared in cities and towns across the empire, Cairo developed into a major center for its trade, contributing to its continued prosperity throughout the seventeenth and much of the eighteenth century. With its strong control of the Red Sea, the Ottomans successfully managed to dispute control of the trade routes to the Portuguese and maintained a significant level of trade with the Mughal Empire throughout the 16th century.^[22]

Unable to decisively defeat the Portuguese or threaten their shipping, the Ottomans abstained from further substantial action, choosing instead to supply Portuguese enemies such as the Aceh Sultanate, and things returned to the Status quo ante bellum.^[23] The Portuguese for their part enforced their commercial and diplomatic ties with Safavid Persia, an enemy of the Ottoman Empire. A tense truce was gradually formed, wherein the Ottomans were allowed to control the overland routes into Europe, thereby keeping Basra, which the Portuguese had been eager to acquire, and the Portuguese were allowed to dominate sea trade to India and East Africa.^[24] The Ottomans then shifted their focus to the Red Sea, which they had been expanding into previously, with the acquisition of Egypt in 1517, and Aden in 1538.^[25]