About 1593, the able chieftain Paillamachu was toqui of the confederacy. The incessant wars against the Araucanians had made the province such a continual drain on the Peruvian treasury, that Mendoza, who had been promoted to the viceregal throne, determined to end this impossible situation in one way or another. A general was sent to Chile with full powers either to treat or fight, but the haughty and intractable Indians rejected with scorn his overtures for peace. He then fortified the line of the Biobio and erected new fortresses to serve as bases for a campaign of extermination to be undertaken as soon as reinforcements arrived. These came slowly and the Indians themselves took the offensive, considerable bands invading the Spanish settlements, storming some forts and blockading others. The Spanish general exerted himself to concentrate his scattered forces, but while making a hasty journey, accompanied only by a small escort, from Imperial toward Concepcion, he was surprised and killed by a band of Indians. Forty-eight hours later not only the whole of Araucania, but also the provinces south of Valdivia, rose in arms. All the Spanish towns south of the Biobio--Osorno, Valdivia, Villarica, Imperial, Cañete, Angol, Coya, and Arauco--were simultaneously besieged. Paillamachu crossed the river and burned first Concepcion and then Chillan, a town a hundred miles north of the Araucanian boundary, ravaging the country to the river Maule. Alarmed for the safety of Santiago, the Lima viceroy sent a new governor with a well-equipped army, but it was as much as he could do to force the Indians back into their own territory. The Indian general suddenly assaulted the city of Valdivia, carried it by storm, slaughtered or captured the inhabitants, and seized two millions of booty with many arms and cannon. Villarica and Imperial managed to hold out for three years but finally they, with Osorno, were reduced by starvation. When Paillamachu died in 1603 the Spaniards had no foothold on the mainland south of the Biobio except the Valdivia citadel.
Two or three years later the government made a last effort to reduce the Araucanians. An army of three thousand Spaniards besides a large contingent of natives advanced across the Biobio. To such an overwhelming force the Araucanians dared not offer open battle, but they hung on its flanks, skirmishing and harassing, and the host was compelled to return without having accomplished anything decisive. From the protection of the forts on the Biobio, the Spanish general sent expeditions to lay waste the Indian country, but these smaller bodies were roughly handled and the first period of Araucanian wars closed with the nearly complete destruction of the Spanish forces operating in southern Chile. The authorities at Lima and Madrid gave it up as a bad job. Thenceforward the Biobio remained the southern boundary of the Spanish possessions. An army of two thousand men and a line of forts guarded the frontier, and though hostilities were frequent, for centuries no real progress was made toward depriving the Araucanians of their independence. In the progress of time the slow infiltration of Spanish blood and Spanish customs modified their characteristics, but it was not until 1882 that they became real subjects of the Chilean government.