As a reaction as the guarantor of the Treaty of Karlowitz, the Austrians threatened the Ottoman Empire, which caused it to declare war in April 1716. In 1716, Prince Eugene of Savoy defeated the Turks at the Battle of Petrovaradin. The Banat and its capital, Timişoara, were conquered by Prince Eugene in October 1716. The following year, after the Austrians captured Belgrade, the Turks sought peace, and the Treaty of Passarowitz was signed on 21 July 1718.

The Habsburgs gained control of Belgrade, Temesvár (the last Ottoman fortress in Hungary), the Banat region, and portions of northern Serbia. Wallachia (an autonomous Ottoman vassal) ceded Oltenia (Lesser Wallachia) to the Habsburg Monarchy, which established the Banat of Craiova. The Turks retained control only of the territory south of the Danube River. The pact stipulated for Venice to surrender the Morea to the Ottomans, but it retained the Ionian Islands and made gains in Dalmatia.