Main article: It is likely that the word 'Brazil' comes from the Portuguese word for, a tree that once grew plentifully along the Brazilian coast. In Portuguese, brazilwood is called pau-brasil, with the word brasil commonly given the etymology 'red like an ember', formed from Latin brasa ('ember') and the suffix -il (from -iculum or -ilium). As brazilwood produces a deep red dye, it was highly valued by the European cloth industry and was the earliest commercially exploited product from Brazil. Throughout the 16th century, massive amounts of brazilwood were harvested by (mostly ) along the Brazilian coast, who sold the timber to European traders (mostly Portuguese, but also French) in return for assorted European consumer goods. The official Portuguese name of the land, in original Portuguese records, was the 'Land of the Holy Cross' ( Terra da Santa Cruz), but European sailors and merchants commonly called it simply the 'Land of Brazil' ( Terra do Brasil) on account of the brazilwood trade.

The popular appellation eclipsed and eventually supplanted the official Portuguese name. Some early sailors called it the 'Land of Parrots'. In the, an official language of, Brazil is called 'Pindorama'. This was the name the indigenous population gave to the region, meaning 'land of the palm trees'.

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Representation of the landing of in, 1500. The land now called Brazil was claimed for the on 22 April 1500, with the arrival of the Portuguese fleet commanded. The Portuguese encountered indigenous peoples divided into several tribes, most of whom spoke languages of the family, and fought among themselves. Though the first settlement was founded in 1532, colonization effectively began in 1534, when King of Portugal divided the territory into the fifteen private and autonomous. However, the decentralized and unorganized tendencies of the captaincy colonies proved problematic, and in 1549 the Portuguese king restructured them into the, a single and centralized Portuguese colony in South America. In the first two centuries of colonization, Indigenous and European groups lived in constant war, establishing alliances in order to gain advantages against each other.

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