The Protestant movement gained ground rapidly in Austria. The nobility in particular turned toward the Lutheran creed. For generations eminent families provided the protagonists of Protestantism in the Lower and Inner Austrian territories. The sons of the nobility were often sent to North German universities to expose them more fully to Protestant influence. From 1521, Protestant pamphlets were produced by Austrian printers. Bans on them, issued from 1523 onward, remained ineffective.

Among the peasant population, the Anabaptists had a stronger appeal than the Lutherans. However, as they had no support from the estates and because of their radicalism, the Anabaptists were persecuted from the start. In 1528 Balthasar Hubmaier, their leader in the Danube countries and in southern Moravia, was burned at the stake in Vienna. In 1536 another Anabaptist, the Tirolean Jakob Hutter, was burned at the stake in Innsbruck after he had led many of his followers into Moravia (see Hutterite). Ferdinand, for his part, advocated religious reconciliation and looked for means to achieve it, but the dogmatic viewpoints proved irreconcilable. The Peace of Augsburg (1555) finally brought some respite in the religious struggles.

Charles V abdicated in 1556, and in 1558 Ferdinand I became Holy Roman emperor; thus, the leadership of the empire was taken over by the Austrian (German) line of the Habsburgs. Maximilian II, the eldest son, followed his father in Bohemia, Hungary, and the Austrian Danube territories (1564). The next son, Ferdinand, was endowed with Tirol and the Vorlande; Charles, the youngest of the brothers, received the Inner Austrian lands and took up residence in Graz. Maximilian was known for his Protestant leanings but was bound by a promise he had given his father to remain true to the Roman Catholic religion. The Protestants were therefore granted fewer concessions from him than they might have expected.

Meanwhile, Catholic counteractivity began, with the Jesuits particularly prominent in Vienna, Graz, and Innsbruck. A new generation of energetic bishops proved a great asset to the cause. It was also of some importance that the monasteries, though they had been deserted by many of their members and were struggling for existence, had not been secularized. On the Protestant side, it proved impossible to reconcile the various reforming movements. Social differences between them, especially between the nobility and the peasants, also stood in the way of a united Protestant front. The Counter-Reformation scored its first successes in Gorizia and Carniola, where Protestantism had remained insignificant. And, in other parts, official religious commissions started to replace the Protestant preachers with Catholic clergymen.

Rudolf II and Matthias

Maximilian’s successor as Holy Roman emperor and as archduke of Austria, his son Rudolf II (reigned 1576–1612), had been educated in Spain strictly in the Catholic faith. He had all Protestants dismissed from court service. The conversion of the cities and market centres of Lower Austria to Catholicism was conducted by Melchior Klesl, at that time administrator of the Vienna see but later to become bishop and cardinal. In Upper Austria, where the Protestants had their strongest hold, the situation remained undecided, with the Catholic governor Hans Jakob Löbl of Greinburg and the Calvinist Georg Erasmus of Tschernembl leading the opposing religious parties. When the future emperor Ferdinand II (the son of Charles, the ruler of Inner Austria) took over in Steiermark, he proved to be the most resolute advocate of the Counter-Reformation. It was he who eventually succeeded in uprooting Protestantism, first in Inner Austria and then in the other Habsburg countries, with the exception of Hungary and Silesia.

From local skirmishes along the frontier, a long drawn-out war with the Turks developed (1592–1606). In 1598 Raab (now Győr, Hungary), which served as a bastion of Vienna, was temporarily lost; Gran, Veszprém (now in Hungary), and Stuhlweissenburg (now Székesfehérvár, Hungary) passed several times from one side to the other. The introduction of the Counter-Reformation in Hungary, moreover, resulted in a rising of Protestant elements under István Bocskay. But in 1606 at Vienna, a peace was concluded between Austria and the Hungarian estates. At Zsitvatorok another peace was negotiated with the Turks, who for the first time recognized Austria and the emperor as an equal partner.

Political disagreements between Emperor Rudolf, who, to an increasing degree, showed signs of mental derangement, and the rest of the family led to the so-called Habsburg Brothers Conflict. Cardinal Klesl in 1607 brought about an agreement between the younger relatives of the emperor to recognize his brother Matthias as the head of the family. As the conflicts with Rudolf persisted, Matthias strove to come to an understanding with the estates, which were mainly Protestant. The formation of opposing religious leagues in Germany, the Protestant Union and the Catholic League, added to the general confusion.

Matthias advanced into Bohemia, and, in the Treaty of Lieben (1608), Rudolf conceded to him the rule of Hungary, the Austrian Danube countries, and Moravia, while Matthias had to give up the Tirol and the Vorlande to the emperor. In 1609 the estates received a confirmation of the concessions that Maximilian II had made to them. The cities were guaranteed only in general terms that their old privileges should not be interfered with. At the same time, Rudolf II was forced to grant to Bohemia the so-called Letter of Majesty, which contained far-reaching concessions to the Protestants. After a final defeat of Rudolf in Bohemia in 1611, Matthias was crowned king of Bohemia. Rudolf’s death in 1612 finally ended the conflict.

After Matthias had been elected emperor, his principal councillor, Cardinal Klesl, tried in vain to arrange an agreement with the Protestants in Germany. The ensuing years were filled with wars in Transylvania, where Gábor Bethlen came to power. In the Peace of Tyrnau (1615) the emperor had to recognize Bethlen as prince of Transylvania, and, in the same year, he extended the truce with the Turks for another 25 years. In the meantime, war had broken out with Venice (1615–17) because of the pirating activities of Serb refugees (Uskoken) established on the Croatian coast. A settlement was reached in the Peace of Madrid. The situation in Bohemia then reached a critical point, the religious tensions in the country finding a vent in the Defenestration of Prague (May 23, 1618), in which two of the emperor’s regents were thrown from the windows of the Hradčany Palace.