Philip II inherited a collection of states that formed a Mediterranean empire comprising Spain, Milan, Naples and Sicily and some outposts in North Africa. Then there were his Atlantic possessions consisting of the Netherlands and the New World: To this was added, in 1580, Portugal and its immense empire. The Atlantic states had the potential to become a powerful empire to match that of the Mediterranean but Philip failed to forge any links between them, preferring to treat them as distinct entities connected only through Madrid. However, like his father Charles V, Philip was continually beset by problems spread across Europe, making conflicting demands on his resources. The reign of Philip II saw a decisive shift in Spanish orientation. For the first 20 years, Philip pursued a defensive policy seeking to minimise conflict. Spain was a Mediterranean power, concerned above all with the menace of Islam and the Ottoman Turks. The conquest and annexation of Portugal brought a dramatic change. The focus of attention swung away frorn the Mediterranean to the Atlantic and Philip became much more aggressive in his foreign policy, waging war not only in the Netherlands but also against England and France. In this study guide suitable for first year university history students, or those in their final year of high school, or those with an interest in Spanish and European history. Topics covered include: Analysis of Philip's administration, governance, and army; The Perez Affair; The Revolt of the Moriscos; Relations with Turkey; the Annexation of Portugal, and the Revolt of Aragon. This book is chapter 13 of the seminal history text 'Years of Renewal: European History 1470-1600', also published by Horsham House.