The discovery and conquest of Ecuador by Spanish forces in the early sixteenth century are adjuncts to the history of the conquest of Peru, the richest of the New World prizes won for the Spanish crown. The central figure of that history is Pizarro, an illiterate adventurer from Trujillo in the Spanish region of Extremadura, who had accompanied Vasco Nunez de Balboa in his crossing of the Isthmus of Panama to discover the Pacific in 1513. Eleven years later, Panamanian governor Pedro Arias de Avila ["Pedrarias"] authorized Pizarro, in partnership with an equally questionable character, a Castilian named Diego de Almagro, and a priest named Fernando de Luque, financing to explore southward down the west coast of South America. Their first two voyages, in 1524 and 1526, ended in failure; not until the third voyage, launched in 1531, would the Peruvian prize be won and the Inca be conquered.

The first European to set foot on the territory of modern-day Ecuador was probably Bartolome Ruiz de Estrada, the pilot for Pizarro on his second voyage, who pushed southward while Pizarro explored the Colombian coast and Almagro returned to Panama for supplies. Pizarro himself landed on the Ecuadorian coast later during his exploratory voyage and traveled as far as Tumbes in the extreme north of present-day Peru, in defiance of official orders to return to Panama.

Having thus lost the favor of the king's representatives in Panama, Pizarro was forced to return to the royal court in Spain to petition King Charles I personally for authorization of a third voyage. Flush with the success of Hernin Cortes in Mexico and tantalized by the gold pieces brought by Pizarro from Tumbes and growing fables of great wealth in the South American interior, Charles granted Pizarro authorization and much more: the titles of governor and captain-general of Peru, a generous salary, and extensive territorial concessions. Almagro was granted important, although less generous, titles and privileges; his resentment of this slight would affect relationships for the rest of the conquest. At the time that Charles granted various titles to Pizarro and Almagro, he named de Luque Bishop of Tumbes. Before returning to Panama in 1530, Pizarro recruited for the conquest several immediate family members, including two full brothers named Gonzalo and Juan as well as two half-brothers. The participation of so many of Pizarro's relatives further strained relations between the two partners in conquest.

Pizarro then embarked from Panama with some 180 men while Almagro remained there to gather additional recruits. After thirteen days at sea, Pizarro landed once again on the coast of Ecuador, where he procured some gold, silver, and emeralds, which were dispatched to Panama and put to good use in Almagro's efforts. Although the capture of the Inca stronghold of Tumbes was Pizarro's first objective, he was forced to spend several months in Ecuador, first nursing a rash of ulcers and then fighting the fierce warriors of the island of Puni. By the time the conquerors arrived in Tumbes, it had been destroyed by the Puni warriors and its population dispersed. Just to the south, they founded the first Spanish settlement in Peru, San Miguel de Tangarari. Upon their fateful departure to Cajamarca on September 24, 1532, Pizarro left a lieutenant, Sebastiin de Benalcizar, in charge of protecting and developing San Miguel as a Spanish base of operations. Two years later, Benalcizar would lead the conquering forces that moved northward into Ecuador.

Meanwhile, Atahualpa was resting near Cajamarca, in the Sierra of northern Peru, following the defeat and capture of his brother. He had known of the arrival of foreign invaders for several months; it is not clear why he did not order their obliteration before they could penetrate into the heart of the empire. After a march of almost two months, Pizarro arrived in Cajamarca and summoned Atahualpa from the nearby thermal baths known today as the Banos del Inca. Reluctantly, accompanied by several thousands of his best troops, Atahualpa went to Cajamarca's central plaza, where he was met, not by the conquistadors, but by their chaplain, Fray Vicente de Valverde, who called upon the Inca emperor to submit to the representatives of the Spanish crown and the Christian god. Atahualpa replied disparagingly and, upon his throwing a Christian prayer book to the ground in contempt, concealed Spanish soldiers opened fire, killing thousands of Atahualpa's defenders and taking the Inca emperor captive. This slaughter, called "the decisive battle" of the conquest of Peru by historian Hubert Herring, took place on November 16, 1532.

A panic-stricken Atahualpa, fearing that Pizarro might be planning to depose him in favor of his rival brother, summoned Huascar, at this time imprisoned in Cuzco, to Cajamarca, then ordered him to be executed along with hundreds of Huascar's nearest of kin. It served the Spaniards' purposes to allow Atahualpa the freedom, from his cell, to command his forces. Thus continued the rapid annihilation, through a vicious civil war that now overlapped with the Spanish conquest, of the army and leadership of one of the great polities