In a series of marriages and conquests, a succession of Dukes of Burgundy expanded their original territory by adding to it a series of fiefdoms, including the Seventeen Provinces. Although Burgundy itself had been lost to France in 1477, the Burgundian Netherlands were still intact when Charles V was born in Ghent in 1500. He was raised in the Netherlands and spoke fluent Dutch, French, Spanish, and some German. In 1506, he became lord of the Burgundian states, among which were the Netherlands. Subsequently, in 1516, he inherited several titles, including that of King of Spain, which had become a worldwide empire with the Spanish colonization of the Americas. In 1519, Charles became ruler of the Habsburg empire, and he gained the title Holy Roman Emperor in 1530. Although Friesland and Guelders offered prolonged resistance (under Grutte Pier and Charles of Egmond, respectively), virtually all of the Netherlands had been incorporated into the Habsburg domains by the early 1540s.
Flanders had long been a very wealthy region, coveted by French kings. The other regions of the Netherlands had also grown wealthy and entrepreneurial. Charles V's empire had become a worldwide empire with large American and European territories. The latter were, however, distributed throughout Europe. Control and defense of these were hampered by the disparity of the territories and huge length of the empire's borders. This large realm was almost continuously at war with its neighbors in its European heartlands, most notably against France in the Italian Wars and against the Ottoman Empire in the Mediterranean Sea. Further wars were fought against Protestant princes in Germany. The Dutch paid heavy taxes to fund these wars, but perceived them as unnecessary and sometimes downright harmful, because they were directed against their most important trading partners.
During the 16th century, Protestantism rapidly gained ground in northern Europe. Dutch Protestants, after initial repression, were tolerated by local authorities. By the 1560s, the Protestant community had become a significant influence in the Netherlands, although it clearly formed a minority then. In a society dependent on trade, freedom and tolerance were considered essential. Nevertheless, Charles V, and from 1555 his successor Philip II, felt it was their duty to defeat Protestantism, which was considered a heresy by the Catholic Church and a threat to the stability of the whole hierarchical political system. On the other hand, the intensely moralistic Dutch Protestants insisted their theology, sincere piety and humble lifestyle were morally superior to the luxurious habits and superficial religiosity of the ecclesiastical nobility. The harsh measures of suppression led to increasing grievances in the Netherlands, where the local governments had embarked on a course of peaceful coexistence. In the second half of the century, the situation escalated. Philip sent troops to crush the rebellion and make the Netherlands once more a Catholic region. Although failing in his attempts to introduce the Spanish Inquisition directly, the Inquisition of the Netherlands (existed until 1564) was nevertheless sufficiently harsh and arbitrary in nature to provoke fervent dislike.
Part of the shifting balance of power in the late Middle Ages meant that besides the local nobility, many of the Dutch administrators by now were not traditional aristocrats but instead stemmed from non-noble families that had risen in status over previous centuries. By the 15th century, Brussels had thus become the de facto capital of the Seventeen Provinces. Dating back to the Middle Ages, the districts of the Netherlands, represented by its nobility and the wealthy city-dwelling merchants, still had a large measure of autonomy in appointing its administrators. Charles V and Philip II set out to improve the management of the empire by increasing the authority of the central government in matters like law and taxes, a policy which caused suspicion both among the nobility and the merchant class. An example of this is the takeover of power in the city of Utrecht in 1528, when Charles V supplanted the council of guild masters governing the city by his own stadtholder, who took over worldly powers in the whole province of Utrecht from the archbishop of Utrecht. Charles ordered the construction of the heavily fortified castle of Vredenburg for defence against the Duchy of Gelre and to control the citizens of Utrecht.
Under the governorship of Mary of Hungary (1531–1555), traditional power had for a large part been taken away both from the stadtholders of the provinces and from the high noblemen, who had been replaced by professional jurists in the Council of State.