The Treaty of Alcáçovas, a.k.a. the Peace of Alcáçovas-Toledo (4 September 1479), ended the War of the Castilian Succession after a decisive Portuguese naval victory off West Africa. Isabella of Castile and Ferdinand of Aragon had already emerged from the indecisive Battle of Toro (1 March 1476) with their rule intact.
The treaty recognised Isabella as Queen of Castile.
Juana de Trastamara and Afonso V waived their rights to the Castilian throne. At the same time, Ferdinand and Isabella renounced any claims to the Portuguese throne.
The treaty divided the Atlantic Ocean and overseas territories into two zones of influence and allowed the Portuguese to continue exploring the African coast. Castile retained the Canary Islands, while Portugal kept the Azores and Madeira. Castile was effectively restricted to the Canaries. Castilians were prohibited from sailing into the Portuguese sphere without an appropriate licence. Portugal also won the right to conquer the Kingdom of Fez.
Juana de Trastámara's Castilian supporters were pardoned. After her marriage to Afonso had been annulled by Pope Sixtus IV, she had a choice between staying in Portugal and entering a religious order or marrying Isabella's infant son. She chose to stay in Portugal.
A marriage contract between the royal families matched Ferdinand and Isabella's daughter (Isabella) and the future João II's heir Afonso. The arrangement included a payment of 106,676 gold dobles as war compensation and Isabella's dowry. Isabella and Afonso were to stay in Portugal at the village of Moura until they came of age. Ferdinand and Isabella were to cover the costs.
The treaty was later ratified by the Papal bull Aeterni regis (1481).