In 1516, Juan Díaz de Solís, a Portuguese mariner in the employ of the Spanish Crown, led a small crew to the shores of the River Plate in the search of a trade route to the Far East. His dream ended here in failure, murdered by the Querandí or the cannibalistic Charrúa, who inhabited the eastern - or Uruguayan - bank. Another brief exploration into the region was made in 1520 by Ferdinand Magellan who continued his epic voyage south to discover the famous straits that now bear his name; while the next significant expedition to this part of the world was made by Sebastian Cabot who reached the River Plate in 1526 and built a small, short-lived fort near modern Rosario. Cabot misleadingly christened the river El Río de la Plata (the River of Silver), after finding bullion amongst the indigenous groups of Paraguay and believing there to be deposits nearby. This was not the case - ironically, this silver had probably been brought there by the Portuguese adventurer, Aleixo García. García, in 1524, traversed the continent as far as the eastern fringes of the Inca empire, but was murdered with his Andean booty on his return journey. The legends that Cabot's discoveries nourished after his return to Spain were to bring nothing but heartache for many that followed. Stories of a fabled civilization - variously called Trapalanda or the City of the Cesars - persisted well into the eighteenth century, tempting many into expeditions whose only return was hardship. Cabot's silver had its most lasting legacy in the word " Argentina " itself, which derives from the metal's Latin name, argentum . First used in a poem in 1602, it was adopted in the nineteenth century as the name of the Republic. A more immediate legacy was that, in 1535, Pedro de Mendoza was authorized by the Spanish Crown to colonize the River Plate in an effort to pre-empt Portuguese conquest. In February 1536, Mendoza founded Buenos Aires, originally named Puerto Nuestra Señora Santa María del Buen Ayre after the "good air" of the sweet-smelling river.

Mendoza's plans soon went awry: it proved impossible to subjugate the local nomadic Querandí, so as to use them for forced agricultural labour. Indeed, their aggression towards the Spanish invaders forced Mendoza to send Pedro de Ayolas upstream to find a more suitable site for settlement. In August 1537, Ayolas founded Nuestra Señora de la Asunción del Paraguay where the Spanish discovered a more amenable indigenous population in the semi-sedentary Guaraní. They received the Spaniards with gifts, including food and women, and, accustomed to agricultural work, they were more easily exploited for labour. Mendoza died at sea on a voyage to Spain and authority for the colony devolved to Domingo de Irala, who, after almost constant struggle with the Querandí, finally ordered the evacuation of Buenos Aires in 1541. By this time, Spanish interest in colonizing this area of the world had decreased significantly anyway, mainly as a result of Pizarro 's spectacular conquest, in 1535, of Inca Peru, with its vast reserves of bullion and a huge indigenous population that represented a tremendous labour resource to the conquerors.

From 1543, the new Viceroyalty of Peru, with its capital at Lima, was given authority over all of southern Spanish South America. The northwestern Andean region of Argentina was first tentatively explored from the north in the mid 1530s, but the impulse for colonizing this region really came with the discovery, in 1545, of enormous silver deposits in Potosí , in Upper Peru (modern-day Bolivia). This led to the establishment of the Governorship of Tucumán , covering a region far larger than the modern province of that name, and embracing most of today's northwest. Conquistadors from Chile and Peru crossed the Andes seeking to press gang the locals into labour and find an overland route to the Potosí silver mines. Francisco de Aguirre founded Santiago del Estero in 1553, Argentina's earliest continually inhabited town, while other Spaniards established the settlements of Mendoza (1561), San Juan (1562), Córdoba (1573), Salta (1582), La Rioja (1591) and San Salvador de Jujuy (1593).

Meanwhile, the Spanish in Asunción sent an expedition of mainly mixed-blood mestizos under the command of Juan de Garay down the River Paraná, founding Santa Fé in 1573 and resettling Buenos Aires in 1580 - this time, for good. Buenos Aires was no longer dependent on having to secure its own indigenous labour force to avoid starvation, as it could be supplied from Asunción. Settlers also benefitted from one vital legacy of the Mendoza settlement - the feral horses and cattle that had multiplied incredibly in the area in the interim. Few then realized the significance these animals would have on most of Argentina's nomadic indigenous groups, who adopted the horse with alacrity and would round up the cattle for trade with Cordillera groups.