By the 1500's the church, headquartered in Rome, had become a major power, spending huge sums of money on art, buildings, and luxuries for leaders. This money came from taxes people paid on crops or land and from the sale of indulgences (payments believed to release people from punishment for their sins).

As the church's demands for money increased, professional indulgence sellers wandered throughout Europe. This was widely resented. A growing spirit of nationalism (interest in one's own country) was present throughout much of Europe, and many people were less willing to support the church in Rome.

The Reformation was the movement in which some countries began to break away from Rome. If one could date its beginning to a specific time and place, it would be October 31, 1517. That was when Martin Luther (1483–1546), a German monk and theology professor, posted 95 propositions in Wittenberg, Germany, inviting theological debate on the sale of indulgences.

Luther believed that the whole system of indulgences was wrong and was contrary to the Bible, especially the writings of Saint Paul. According to Saint Paul, salvation is assured simply by faith in God's love and mercy. Luther soon won numerous German princes to his side, who saw the movement as an opportunity to weaken Rome's power over their country. Luther's translation of the Bible into German also helped spread his teachings, as more people could read scripture for the first time.

In 1521, after much debate with papal authorities, Luther was excommunicated (deprived of the sacraments and the rights of church membership) from the Catholic Church.

Other leaders of the Reformation, or Protestant, movement included Huldreich Zwingli (1484–1531), a pastor in Zurich, Switzerland; John Knox (1513?–72), a Scottish minister who lived in Geneva; and John Calvin (1509–64), a native of Picardy, France. Calvin, who had escaped to Geneva after being charged with heresy in his home country, developed a form of Protestantism (Calvinism) that had a great impact on the United States and Europe. (In France, Calvin's followers were called Huguenots.) A major doctrine of Calvinism was that God alone determined the destiny—salvation or damnation—of human souls. Humans could do nothing to save themselves.

In England, the factors leading to the Reformation were more political than religious. King Henry VIII (1491–1547) wished to divorce his wife, Catherine of Aragon. Not only had they failed to produce a male heir, but Henry also wanted to marry Anne Boleyn, a lady of the court. When Pope Clement VII refused to grant a divorce, Henry decided to reject papal authority and make himself head of the English church. Conflict over reform in the English church continued after his death.

Under the boy-king Edward VI (1537–53), greater reforms were adopted, only to be undone when Mary I (1516–58) turned back to Catholicism. During the long reign of her successor, Elizabeth I (1533–1603), the Church of England reached a compromise, resulting in a church (called Anglican or Episcopal) that combined elements of Protestantism and Roman Catholicism. This was possible because no single theologian such as Luther or Calvin ever dominated the English church. In 1611 it also issued the most famous English translation of the Bible, the King James Version, which is still widely used today.

Although successful only in northern Europe, the Reformation made inroads throughout much of the continent at various times. In southern and eastern Europe, however, Catholicism retained its strength. This was largely because the Reformation had led to the Counter, or Catholic, Reformation.

The Counter Reformation was an attempt by individuals within the Catholic Church to reform it and correct abuses. Leading this movement was the Society of Jesus (Jesuits) founded by the Spanish priest and former soldier Saint Ignatius of Loyola (1491–1556). Many of these reforms were formalized by the Council of Trent (1545–63). The Council did much to strengthen Catholicism and to create modern Roman Catholicism.

The Reformation and Counter Reformation sparked years of war, persecution, and violence. During the Thirty Years' War (1618–48), nearly half the population of the German states died from the conflict or from the accompanying famine and disease. When the war ended with the Peace of Westphalia, Europe found itself religiously divided between Catholics and Protestants. Southern Europe—Italy, France, Spain, and Portugal—remained Catholic, as did Austria, southern Germany, Poland, Slovenia and Croatia, and the Low Countries (present-day Belgium, Luxembourg, and the Netherlands). Protestantism dominated in England, Scotland, northern Germany, northern Holland, the Scandinavian countries, and Bohemia (part of the present-day Czech Republic) and Hungary. In eastern Europe and Greece, the Orthodox Church continued on its course, relatively untroubled by events on the rest of the continent.

The religious wars of the 1500's and 1600's helped usher in the Enlightenment, a period characterized by fresh views of religion and society. During this time, thinkers such as Montesquieu (1689–1755), John Locke (1632–1704), Wilhelm Leibniz (1646–1716), and others argued that religion was a private matter and not a governmental concern. Others saw the damage that religious wars had inflicted on economies and argued that religious differences should not interfere with business. Still others asserted that the human mind was created free by God and that the individual conscience should not, and could not, be coerced. Many rejected the idea that the state should enforce religious conformity according to its ruler's religious views.

The Dutch were among the earliest to accept the notion of religious tolerance, but only informally. Legal measures favoring religious tolerance were first adopted in England. Although the Church of England would (and still does) remain the state church, toleration (a government policy of allowing unsanctioned forms of worship and belief) was granted to all Protestants in 1689. Catholics would not receive full religious and political freedom until 1829, a remnant of the Reformation-era conflicts.

Meanwhile, conflicts between Catholics and Protestants and between different sects of Protestantism dominated Europe into the 1700's. When Europeans arrived in the New World, Catholicism was the religion of Europe and the first European settlements were therefore Catholic. With the Reformation, the New World became a source of conflict between Protestant England and Catholic Spain and France. In British North America, different sects of Protestantism clashed. In New England, the Puritans attempted to create a religiously pure commonwealth, while the Church of England was established in many colonies. New York, which passed from Swedish to Dutch to British control, saw its religious establishment change from Lutheranism to Dutch Reformed to the Church of England.

Maryland, established as a haven for Catholics, adopted a policy of toleration for all Christians. This was short-lived, however, and the Church of England was established there in 1702. Of all the colonies, only Pennsylvania and Rhode Island practiced religious tolerance and were without established religions. This changed soon after the creation of the United States. Because the U.S. Constitution guaranteed freedom of religion, religious liberty expanded greatly.

At this time also, the European powers—primarily France, Spain, England, and Portugal—were colonizing other parts of the Western Hemisphere, as well as Africa and parts of Asia. They also introduced Christianity. While the Christianization of Asia was relatively unsuccessful, with the exception of the Philippines, Christianity would become a major religion in much of Africa.

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