Argentina had claimed sovereignty over the Falkland Islands (which lie 300 miles 【480 km】 east of its coast) since the early 19th century, but Britain had seized the islands in 1833, expelling the few remaining Argentine occupants, and since then had consistently rejected Argentina's claims. In early 1982 the Argentine military junta led by Lt. Gen. Leopoldo Galtieri gave up on long-running negotiations with Britain and instead launched an invasion of the islands. The decision to invade was chiefly political: the junta, which was being criticized for economic mismanagement and human rights abuses, believed that the “recovery” of the islands would unite Argentines behind the government in a patriotic fervour. An elite invasion force trained in secrecy, but its timetable was shortened on March 19 when a dispute erupted on British-controlled South Georgia island (800 miles 【1,300 km】 east of the Falklands), where Argentine marines posing as salvage workers had raised the Argentine flag. Naval forces were quickly mobilized.

Argentine troops invaded the Falklands on April 2, rapidly overcoming the small garrison of British marines at the capital of Stanley (Port Stanley); they obeyed orders not to inflict any British casualties, despite losses to their own units. The next day Argentines seized the associated islands of South Georgia and the South Sandwich (South Sandwich Islands) group. By late April Argentina had stationed more than 10,000 troops on the Falklands, although the vast majority of these were poorly trained conscripts.

As expected, the Argentine populace reacted favourably, with large crowds gathering at the Plaza de Mayo (in front of the presidential palace) to demonstrate support for the military initiative. In response to the invasion, the British government under Prime Minister Margaret Thatcher (Thatcher, Margaret) declared a war zone for 200 miles (320 km) around the Falklands and assembled a naval task force with which to retake the islands. Most European powers voiced support for Great Britain, and European military advisers were withdrawn from Argentine bases; however, most Latin American governments sympathized with Argentina. A notable exception was Chile, which maintained a state of alert against its neighbour, owing to a dispute over islands in the Beagle Channel. The perceived threat from Chile prompted Argentina to keep most of its elite troops on the mainland, distant from the Falklands theatre. In addition, Argentine military planners had trusted that the United States would remain neutral in the conflict, but, following unsuccessful mediation attempts, the United States offered full support to Great Britain, allowing its NATO ally to use its air-to-air missiles, communications equipment, aviation fuel, and other military stockpiles on British-held Ascension Island (Ascension), as well as cooperating with military intelligence.

On April 25, while the British task force was steaming 8,000 miles (13,000 km) to the war zone via Ascension Island, a smaller British force retook South Georgia island, in the process capturing one of Argentina's vintage diesel-electric submarines. On May 2 the Argentine cruiser General Belgrano was sunk outside the war zone by a British submarine. Following this controversial event, most other Argentine ships were kept distant from the conflict, but Argentine submarine action continued to threaten the British fleet. Meanwhile, the British naval force and the land-based Argentine air force fought intensive battles, during which the Argentines sank HMS Sheffield and the container ship Atlantic Conveyor with Exocet air-to-sea missiles. In addition, two frigates and another destroyer were sunk and several other vessels damaged, but the majority of Argentine bombs did not detonate. Argentina also failed to prevent the British from making an amphibious landing near Port San Carlos, on the northern coast of East Falkland, on May 21. From this beachhead the British infantry advanced southward to capture the settlements of Darwin and Goose Green, after which they turned eastward to surround Stanley on May 31. The large Argentine garrison there surrendered on June 14, effectively ending the conflict. British forces reoccupied the South Sandwich Islands on June 20.

The British captured some 11,400 Argentine prisoners during the war, all of whom were afterward released. Nearly 750 Argentine troops were killed—including 368 in the sinking of the General Belgrano—while Britain lost 256. Scores of Argentine aircraft of various types were destroyed, most while on the ground, and the British lost 10 Harrier jets and more than two dozen helicopters. Military strategists have debated key aspects of the conflict but have generally underscored the roles of submarines (both Britain's nuclear-powered vessels and Argentina's older, diesel-electric craft) and antiship missiles (both air-to-sea and land-to-sea types). The war also illustrated the importance of air superiority—which the British had been unable to establish—and of advanced surveillance. Logistic support was vital as well, because the armed forces of both countries had operated at their maximum ranges. (See also naval warfare: The age of the guided missile (naval warfare).)

Argentina's ignominious defeat severely discredited the military government and led to the restoration of civilian rule there in 1983. Meanwhile, British Prime Minister Margaret Thatcher converted widespread patriotic support into a landslide victory for her Conservative Party in that year's parliamentary election.