In 425 BC the Spartans had lost the battles of Pylos and Sphacteria, a severe defeat resulting in the Athenians holding many Spartan prisoners. They had recovered by 424 BC, when the Spartan general Brasidas captured Amphipolis. That same year, the Athenians suffered a major defeat in Boeotia at the Battle of Delium, and in 422 BC they were defeated at the Battle of Amphipolis in their attempt to take back that city. Both sides were exhausted and ready for peace.

The negotiations were begun by Pleistoanax, King of Sparta, and the Athenian general Nicias. Both decided to return everything that they had conquered during the war, except for Nisaea, which would remain in Athenian hands, and Plataea, which remained under the control of Thebes. Most notably, Amphipolis would be returned to Athens, and the Athenians would release the prisoners taken at Sphacteria. Temples throughout Greece would be open to worshippers from all cities, and the oracle at Delphi would regain its autonomy. Athens could continue to collect tribute from the states that done so since the time of Aristides, but Athens could not force them to become allies. Athens also agreed to come to Sparta's aid if the helots revolted. All of Sparta's allies agreed to sign the peace, except for the Boeotians, Corinth, Elis, and Megara.

Seventeen representatives from each side swore an oath to uphold the treaty, which was meant to last for fifty years. These representatives were, for Sparta, the kings Pleistoanax and Agis II, Pleistolas, Damagetus, Chionis, Metagenes, Acanthus, Daithus, Ischagoras, Philocharidas, Zeuxidas, Antiphus, Tellis, Alcindas, Empedias, Menas, and Laphilus. The Athenian representatives were Lampon, Isthmonicus, Nicias, Laches, Euthydemus, Procles, Pythodorus, Hagnon, Myrtilus, Thrasycles, Theagenes, Aristocrates, Iolcius, Timocrates, Leon, Lamachus, and Demosthenes.

However, neither side was satisfied, and the treaty was later broken and rendered useless.

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