In December 1897, a Russian fleet appeared off Port Arthur. After three months, in 1898, China and Russia negotiated a convention by which China leased (to Russia) Port Arthur, Talienwan and the surrounding waters. The two parties further agreed that the convention could be extended by mutual agreement. The Russians clearly expected such an extension, for they lost no time in occupying the territory and in fortifying Port Arthur, their sole warm-water port on the Pacific coast and of great strategic value. A year later, to consolidate their position, the Russians began to build a new railway from Harbin through Mukden to Port Arthur, the South Manchurian Railroad. The development of the railway became a contributory factor to the Boxer Rebellion, when Boxer forces burned the railway stations.

The Russians also began to make inroads into Korea. A large point of Russia's growing influence in Korea was Gojong's internal exile to the Russian legation. A pro-Russian cabinet emerged in the Korean Empire. In 1901, Tsar Nicholas II told Prince Henry of Prussia, "I do not want to seize Korea but under no circumstances can I allow Japan to become firmly established there. That will be a casus belli." By 1898 they had acquired mining and forestry concessions near the Yalu and Tumen rivers, causing the Japanese much anxiety.