New Spain claims the entire west coast of North America and therefore considers the Russian fur trading activity in Alaska, which had begun in the middle to late eighteenth century, an encroachment and threat.

Likewise, the exploration of the northwest coast by James Cook of the British Navy and the subsequent fur trading activities by British ships are considered an invasion of Spanish territory.

British merchants, encouraged by Sir Joseph Banks and supported by their government, begin making a sustained attempt to develop this trade despite Spain's claims and navigation rights.

To protect and strengthen its claim, New Spain sends a number of expeditions from San Blas, Mexico, to the Pacific Northwest between 1774 and 1793.

Detailed information about Russian activities in Alaska had been acquired in 1788, including ominous indications that Russian might seize control of Nootka Sound.

This, in addition to the rapidly increasing numbers of fur traders working the Pacific Northwest coast—mainly British but also American and others—coupled with Spain's firm claim of sovereignty north to 61°N latitude (the vicinity of Prince William Sound, Alaska), and the lack of any Spanish outpost north of California, makes it imperative that a firm stand be taken.

Spain had sent Sub-Lieutenant Esteban José Martinez, commanding the Princesa and the San Carlos, to enforce Spanish sovereignty and defend its claims in February 1789.

Arriving in May 1789, he has established a settlement and established a naval outpost called Santa Cruz de Nuca (or just Nuca) at Friendly Cove in Nootka Sound (now Yuquot), Vancouver Island.

Martinez had formally occupied the land and begun checking the papers of visiting vessels.

Two American fur trading ships are already anchored in the sound, one of which is the Columbia Rediviva, and more arrive later, including the Lady Washington, under Robert Gray.

The two American ships are allowed to sail, as the United States had been Spain's ally, Spain having aided the US in its War of Independence.

However, the American ship Fair American, under the command of Simon Metcalfe, is seized and taken to the naval base at San Blas, before being released.