Macau was under Portuguese rule from the establishment of the first official Portuguese settlement in 1557 until its handover to China in 1999. It comprised the Municipality of Macau and the Municipality of Ilhas. Macau was both the first and last European holding in China.
Macau's history under Portugal can be broadly divided into three distinct political periods. The first was the establishment of the Portuguese settlement in 1557 to 1849. The Portuguese had jurisdiction over the Portuguese community and certain aspects of the territory's administration but no real sovereignty. Next came the colonial period, which scholars generally place from 1849 to 1974. As Macau's importance among other territories grew within the Portuguese Empire, Portuguese sovereignty over Macau strengthened and it became a constitutional part of Portuguese territory. Chinese sovereignty during this era was mainly nominal. Finally, in the aftermath of the 12-3 incident in 1966, the third was the transition period or post-colonial period, after the Carnation Revolution in 1974 until the handover in 1999.