In 1588 the Republic of the United Provinces consisted of the seven sovereign provinces of Holland, Zeeland, Utrecht, Friesland, Groningen, Overijssel and Gelderland, the most powerful being Holland. Each of the provinces elected a Stadholder. The office of Stadholder had originally been intended for the King of Spain's representative or proxy but under the Republic the Stadholder became the servant of the States and an entirely new form of government came into being. This was headed by the States General, which was made up of representatives of the seven sovereign provinces and met in The Hague. Because unanimity was required in voting on matters relating to defence and taxation, and because such issues had to be debated by the provincial assemblies first, it was difficult for the States General to act decisively and decision-making was subject to long delays. Each of the provinces also had a paid legal adviser or 'Pensionary', known in Holland as the Advocate. These were influential officials, especially in a powerful province like Holland, since they acted as spokesmen for their provinces in the States General and also as intermediaries between the States and foreign powers. Johan van Oldenbarnevelt and Johan de Witt were the most influential of these Advocates or Grand Pensionaries, as they were later called.

Following the departure of the Earl of Leicester in 1587, the situation seemed desperate. He took with him the troops under his command and the States were left to rely wholly on their own resources. Moreover, the might of Spain seemed about to subjugate Protestant England through the efforts of the Armada, backed by the land-based forces of the Duke of Parma. However, the expedition was a disaster. Admiral Justinus van Nassau was able to prevent Parma's army from joining forces with the Spanish fleet and the English navy was able, with the assistance of ships from Zeeland and Holland, to smash the 'invincible' Armada. Further decimated by storms, the remaining ships sailed north round Scotland to limp home to Spain. Of the original 130 ships, only about 80 survived. This triumph over Catholic Spain won the Protestant states great respect in Europe.

With the help of the political strategist Oldenbarnevelt, William of Orange's son Maurice improved the organisation of resistance to Spain. He reorganised the army and introduced new techniques of warfare. Oldenbarnevelt provided him with the necessary funding by uniting the States and promoting Maurice as the new Stadholder. Leicester, who had come from England to help defend the provinces against the Spanish but then usurped more and more power, certainly helped to encourage the development of Oldenbarnevelt's political genius and the growth of unity within the States. Maurice's greatest successes were the capture of Breda in 1590, when he smuggled 68 young men into the town in the hold of a ship carrying peat, and the defeat of the Spaniards at Nieuwpoort in 1600. His closest military associate was William Louis, Count of Nassau and Stadholder of Friesland, Groningen and Drenthe.