In 1099 the First Crusade had taken Jerusalem, massacring much of its population and founding a Latin kingdom. For a century the Crusader states clung to the eastern Mediterranean coast. The man who changed this balance was Saladin (Salah ad-Din), a commander of Kurdish origin who united Egypt and Syria under a single rule.

In the summer of 1187 Saladin drew the Crusader army onto a waterless hill in Galilee known as the Horns of Hattin. Exhausted by heat and thirst, the Crusader army was almost entirely destroyed on 4 July; the King of Jerusalem and many nobles were captured. This victory collapsed the defences of the Crusader states.

A few months later Saladin besieged Jerusalem, and the city surrendered. Unlike the massacre of 1099, Saladin allowed the population to leave safely in exchange for ransom; many of the poor who could not pay were freed. This restraint was noted with respect even in contemporary European sources, and turned Saladin into the archetype of the 'noble enemy' in Western literature.

The fall of Jerusalem triggered the Third Crusade in Europe; the struggle between King Richard the Lionheart of England and Saladin is famous, but Jerusalem remained in Muslim hands. The Ayyubid order Saladin united shaped the political map of the region for centuries to come.