The alliance with Sparta during the Peloponnesian…

Agesilaus defeats Tissaphernes at Sardis in 395 BCE, but the powerful Persian navy drives him back.

Tissaphernes is subsequently assassinated on the orders of Artaxerxes, due to the persuasions of Parysatis, mother of Cyrus.

The restored Athenian democracy remains suspicious of, and hostile to, Sparta.

These feelings, along with the straightforward desire at all social levels for the benefits of empire, are exploited by Thebans at Athens in 395 in their appeal to Athens to join in war against Sparta.

A quarrel arises between Locris, …

…abetted by the much-reorganized Boeotian defensive league, and …

…Phocis.

When the Phocians appeal to Sparta, Lysander (now back in qualified favor at Sparta) invades Boeotia.

He is immediately killed at the battle of Haliartus, however, which is a grave military loss to Sparta.

Athens, having rebuild its fleet with Persian money, destroys Sparta’s naval power in 394 in a battle off Knidos.

Spartan King Agesilaus raids Phrygia again in 394 BCE, but he has been unable to prevent the formation of the huge Persian fleet.

Pharnabazus had persuaded Artaxerxes to organize a naval counterstroke against Sparta, and in August 394, the Persian navy, jointly commanded by Pharnabazus and the Athenian admiral Conon, completely destroys the Spartan fleet off Cnidus and gains the mastery of the Aegean.

Evagoras of Salamis participates in the naval victory.

Sparta, with little to show for its campaign against the Persians, recalls Agesilaus' army from Asia Minor in order to battle the anti-Spartan coalition formed in 395 by Argos, Corinth and Thebes, with Athens, their former enemy in the Peloponnesian War.

The Ephesians desert in 394 BCE to Conon's anti-Spartan maritime league.