Following two decades of conflict in the Great Northern War, the Treaty of Nystad was signed to settle disputes primarily between Sweden and Russia. The war began in 1700 and included various other nations such as Denmark-Norway and Saxony, resulting from Sweden's rise to power in the region. The treaty was negotiated at the conclusion of a lengthy period of military engagement, which had shaped the balance of power across Northern Europe. It marked a definitive resolution to a conflict characterized by significant battles such as the Battle of Poltava in 1709, where Swedish forces faced a major defeat, further weakening their position.

The signing took place in the town of Nystad, located in what is now Finland. The terms of the treaty were heavily favorable to Russia, which had gained substantial territories, including key regions of Baltic provinces like Estonia and Livonia. Sweden, once a dominant military power, was forced to cede valuable territories, marking a decline in its influence. The treaty not only reshaped the borders of Northern Europe but also signaled a transition in Europe’s political landscape, with Russia emerging as a formidable power under the rule of Tsar Peter the Great.

The Treaty of Nystad effectively ended the Great Northern War and set the tone for future relations between Sweden and Russia. With this peace agreement in place, both nations focused on internal development and rebuilding. The treaty catalyzed Russia's expansion and modernization, allowing it to assert itself more aggressively in future conflicts and international affairs. As a critical pivot in the history of both nations, the treaty facilitated changes that would have long-reaching effects in European geopolitics.