In 1834 the EIC lost its trading monopoly in China and Queen Victoria appointed Lord Napier as first commissioner of trade for the country. Napier's first visit to the southern port of Canton (now Guangzhou), where the rigid Canton System controlled all trade with China, failed to convince the Chinese authorities to open up further ports for trading. In 1837, the Qing government, having dithered for a while on the correct approach to the problem of growing opium addiction amongst the people, decided to expel merchants involved in the illegal trade.

Although some officials argued that a tax on opium would yield a profit for the imperial treasury, the Daoguang Emperor instead decided to stop the trade altogether and severely punish those involved. He appointed respected scholar and government official Lin Zexu as Special Imperial Commissioner to enforce his will. Soon after his arrival in Canton in the middle of 1839, Lin Zexu wrote to Queen Victoria in an appeal to her moral responsibility to stop the opium trade. The letter elicited no response but it was later reprinted in the London Times as a direct appeal to the British public. An edict from the Daoguang Emperor followed on 18 March, emphasising the serious penalties for opium smuggling that would now apply.

On 18 March 1839, Lin summoned the twelve Chinese merchants of the Cohong who acted as intermediaries for the foreign opium traders. He told them that all European merchants were to hand over the opium in their possession and cease trading in opium immediately. The commissioner went on to call the Cohong "traitors" and accuse them of complicity in the illegal trade; they had three days to persuade the foreigners to forfeit their opium or two of them would be executed and their wealth and lands confiscated. Thus, the seizure and destroying of opium began.

In early July 1839 a group of British merchant sailors in Kowloon became intoxicated. Two of the sailors beat to death a villager from nearby Tsim Sha Tsui called Lin Weixi. Superintendent Charles Elliot ordered the arrest of the two men, and paid compensation to Lin Weixi's family and village. However, the event led to an more political incident resulting in the Battle of Kowloon.

In late October 1839 the merchant ship Thomas Coutts arrived in China and sailed to Canton. Thomas Coutts's Quaker owners refused on religious grounds to deal in opium, a fact that the Chinese authorities were aware of. The ship's captain, Warner, believed Charles Elliot had exceeded his legal authority by banning the signing of the "no opium trade" bond, and negotiated with the governor of Canton. Warner hoped that all British ships not carrying opium could negotiate to legally unload their goods at Chuenpi, an island near Humen. To prevent other British ships from following Thomas Coutts's precedent, Charles Elliot ordered a blockade of British shipping in the Pearl River and the First Battle of Chuenpi followed.

As a result of the Chinese crackdown on the opium trade, discussion arose as to how Britain would respond, as the public in the United States and Britain had previously expressed outrage that Britain was supporting the opium trade. Many British citizens sympathised with the Chinese but the Whig controlled government in particular advocated war with China, and the pro-Whig press printed stories about Chinese "despotism and cruelty".

At the time of the First Opium War, the Whig Melbourne Government was in a weak political situation. It barely survived a motion of non-confidence on 31 January 1840 by a majority of 21. The Tories saw the China Question as an opportunity to beat the Government and so a debate on British Trade Policy in respect of China began.

In 1841 the Chinese opened negotiations and dismissed Lin Zexu. As the Chinese concessions were regarded as inadequate, hostilities continued; the British entered the Yangtze estuary and threatened Nanjing. In this first armed conflict with the West, China found herself defenceless owing to her lack of a navy, and it was also found that the European weapons were far superior to those of the Chinese.

In the wake of China's military defeat, with British warships poised to attack Nanjing, British and Chinese officials negotiated on board HMS Cornwallis anchored in the Yangtze at the city. On 29 August, British representative Sir Henry Pottinger and Qing representatives Qi Ying, Yilibu, and Niu Jian signed the Treaty of Nanking. The treaty was ratified by the Daoguang Emperor on 27 October and Queen Victoria on 28 December 1842.

It was followed in 1843 by the Treaty of the Bogue, which granted extra-territoriality and most favoured nation status to Great Britain. The Treaty of Wangxia was the first of the unequal treaties imposed by the United States on China.

The missionaries returned but, up until 1860, they were only permitted to work in the treaty ports. Shanghai was thrown open in 1843, and developed with extraordinary rapidity from a town to a city of a million and a centre of world-wide importance.