The civil war between the Lê-Trịnh and Mạc dynasties ended in 1592, when the army of Trịnh Tùng conquered Hanoi and executed king Mạc Mậu Hợp. Survivors of the Mạc royal family fled to the northern mountains in the province of Cao Bằng and continued to rule there until 1677 when Trịnh Tạc conquered this last Mạc territory. The Lê monarchs, ever since Nguyễn Kim's restoration, only acted as figureheads. After the fall of the Mạc dynasty, all real power in the north belonged to the Trịnh lords. Meanwhile, the Ming court reluctantly decided on a military intervention into the Vietnamese civil war, but Mạc Đăng Dung offered ritual submission to the Ming Empire, which was accepted.

In the year 1600, Nguyễn Hoàng also declared himself Lord (officially "Vương") and refused to send more money or soldiers to help the Trịnh. He also moved his capital to Phú Xuân, modern-day Huế. Trịnh Tráng succeeded Trịnh Tùng, his father, upon his death in 1623. Tráng ordered Nguyễn Phúc Nguyên to submit to his authority. The order was refused twice. In 1627, Trịnh Tráng sent 150,000 troops southward in an unsuccessful military campaign. The Trịnh were much stronger, with a larger population, economy and army, but they were unable to vanquish the Nguyễn, who had built two defensive stone walls and invested in Portuguese artillery.

The Trịnh–Nguyễn War lasted from 1627 until 1672. The Trịnh army staged at least seven offensives, all of which failed to capture Phú Xuân. For a time, starting in 1651, the Nguyễn themselves went on the offensive and attacked parts of Trịnh territory. However, the Trịnh, under a new leader, Trịnh Tạc, forced the Nguyễn back by 1655. After one last offensive in 1672, Trịnh Tạc agreed to a truce with the Nguyễn Lord Nguyễn Phúc Tần. The country was effectively divided in two.

The Trịnh–Nguyễn War gave European traders the opportunities to support each side with weapons and technology: the Portuguese assisted the Nguyễn in the South while the Dutch helped the Trịnh in the North. The Trịnh and the Nguyễn maintained a relative peace for the next hundred years, during which both sides made significant accomplishments. The Trịnh created centralized government offices in charge of state budget and producing currency, unified the weight units into a decimal system, established printing shops to reduce the need to import printed materials from China, opened a military academy, and compiled history books.

Meanwhile, the Nguyễn lords continued the southward expansion by the conquest of the remaining Cham land. Việt settlers also arrived in the sparsely populated area known as "Water Chenla", which was the lower Mekong Delta portion of the former Khmer Empire. Between the mid-17th century to mid-18th century, as the former Khmer Empire was weakened by internal strife and Siamese invasions, the Nguyễn Lords used various means, political marriage, diplomatic pressure, political and military favors, to gain the area around present-day Saigon and the Mekong Delta. The Nguyễn army at times also clashed with the Siamese army to establish influence over the former Khmer Empire.