Philip at the time of his accession to the sovereignty of the Netherlands was already King of Naples and Sicily, and Duke of Milan, and, by his marriage in 1554 to Mary Tudor, King-consort of England, in which country he was residing when summoned by his father to assist at the abdication ceremony at Brussels. A few months later (January 16, 1556) by a further act of abdication on the part of Charles V he became King of Castile and Aragon. It was a tremendous inheritance, and there is no reason to doubt that Philip entered upon his task with a deep sense that he had a mission to fulfil and with a self-sacrificing determination to spare himself no personal labour in the discharge of his duties. But though he bore to his father a certain physical likeness, Philip in character and disposition was almost his antithesis. Silent, reserved, inaccessible, Philip had none of the restless energy or the geniality of Charles, and was as slow and undecided in action as he was bigoted in his opinions and unscrupulous in his determination to compass his ends. He found himself on his accession to power faced with many difficulties, for the treasury was not merely empty, it was burdened with debt. Through lack of means he was compelled to patch up a temporary peace (February 5, 1556) with the French king at Vaucelles, and to take steps to reorganise his finances.

One of Philip's first acts was the appointment of Emmanuel Philibert, Duke of Savoy, to the post vacated by his aunt Mary; but it was a position, as long as the king remained in the Netherlands, of small responsibility. Early in 1556 he summoned the States-General to Brussels and asked for a grant of 1,300,000 florins. The taxes proposed were disapproved by the principal provinces and eventually refused. Philip was very much annoyed, but was compelled to modify his proposals and accept what was offered by the delegates. There was indeed from the very outset no love lost between the new ruler and his Netherland subjects. Philip had spent nearly all his life in Spain, where he had received his education and early training, and he had grown up to manhood, in the narrowest sense of the word, a Spaniard. He was as unfamiliar with the laws, customs and privileges of the several provinces of his Netherland dominions as he was with the language of their peoples. He spoke and wrote only Castilian correctly, and during his four years' residence at Brussels he remained coldly and haughtily aloof, a foreigner and alien in a land where he never felt at home. Philip at the beginning of his reign honestly endeavoured to follow in his father's steps and to carry out his policy; but acts, which the great emperor with his conciliatory address and Flemish sympathies could venture upon with impunity, became suspect and questionable when attempted by the son. Philip made the great mistake of taking into his private confidence only foreign advisers, chief among whom was Anthony Perrenot de Granvelle, Bishop of Arras, a Burgundian by birth, the son of Nicholas Perrenot, who for thirty years had been the trusted counsellor of Charles V.

The opening of Philip's reign was marked by signal military successes. War broke out afresh with France, after a brief truce, in 1557. The French arms however sustained two crushing reverses at St Quentin, August 10, 1557, and at Gravelines, July 13, 1558. Lamoral, Count of Egmont, who commanded the cavalry, was the chief agent in winning these victories. By the treaty of Cateau-Cambresis peace was concluded, in which the French made many concessions, but were allowed to retain, at the cost of Philip's ally, the town of Calais which had been captured from the English by a surprise attack in 1558. By the death of Queen Mary, which was said to have been hastened by the news of the loss of Calais, Philip's relations with England were entirely changed, and one of the reasons for a continuance of his residence in the Netherlands was removed. Peace with France therefore was no sooner assured than Philip determined to return to Spain, where his presence was required. He chose his half-sister Margaret, Duchess of Parma, to be regent in place of the Duke of Savoy. In July he summoned the Chapter of the Order of the Golden Fleece - destined to be the last that was ever held - to Ghent in order to announce his intended departure. A little later the States-General were called together, also at Ghent, for a solemn leave-taking. On August 26, Philip embarked at Flushing, and quitted the Netherlands, never again to return.