The Suez Canal was opened in 1869 under the French engineer Ferdinand de Lesseps. It shortened the sea distance between Europe and Asia by thousands of kilometres and became the strategic heart of British imperial communications with India and the Far East. In 1875 Disraeli bought the canal shares from a financially collapsing Egyptian khedive; in 1882 Britain occupied Egypt outright, and for almost seventy years the canal — though physically inside Egyptian territory — was operated by an Anglo-French joint-stock company. Its revenues went to shareholders, not to Egypt; built on the labour of thousands of Egyptian workers, the infrastructure remained an open wound on the country's sovereignty. The 1952 Free Officers' coup deposed King Farouk; by 1954 Gamal Abdel Nasser had consolidated power. To finance the Aswan High Dam he turned to the United States, Britain, and the World Bank; but after Nasser bought arms from Czechoslovakia, drew closer to the Soviet bloc, and recognised the People's Republic of China, John Foster Dulles withdrew the loan offer in July 1956. Nasser's response came on the evening of 26 July: in the middle of a speech in Alexandria, he repeated the name 'de Lesseps' over and over — a code for Egyptian forces to seize control of the canal. The canal had been nationalised.

For British Prime Minister Anthony Eden, Nasser was 'a new Hitler' and control of Suez must not be lost. France suspected Nasser of backing the Algerian war of independence and wanted to punish him. Israel wanted to end fedayeen raids across the Sinai border and to open the Gulf of Aqaba. On 22–24 October 1956 the three powers met secretly at Sèvres near Paris and signed a three-page protocol. The plan was simple: Israel would attack the Sinai, after which Britain and France would 'intervene to stop the war' in the canal zone — a thin veneer of impartiality over coordinated aggression. On 29 October Israel attacked; on 5 November Anglo-French paratroopers dropped on Port Said. Militarily the operation succeeded. The international reaction was devastating. Eisenhower had not been forewarned, and on the eve of US elections and simultaneously with the Soviet invasion of Hungary he was astonished by his allies' imperial adventure. Washington brought Britain to its knees by threatening an oil embargo against sterling and blocking an IMF loan. The USSR rattled nuclear threats. The UN General Assembly's emergency session passed Resolution 997 demanding an immediate ceasefire and withdrawal. Ceasefire came on 7 November; British and French withdrawal in December; Israeli withdrawal in March 1957. The canal remained Egyptian.

The historical dimension of the crisis was much larger than its military events. For Britain, Suez was 'the funeral of empire': no major military operation could now be conducted without American consent. Anthony Eden resigned in January 1957; his successor Harold Macmillan would proclaim African decolonisation in his 'Wind of Change' speech (Cape Town, 1960). For France the lesson was different — the orientation toward Europe accelerated (the Treaty of Rome the following year, 1957), and the decision to acquire an independent nuclear deterrent (the force de frappe) was reinforced. For Israel, the UN Emergency Force, UNEF, took up buffer positions in the Sinai — Nasser's demand for UNEF's withdrawal in 1967 would light the fuse of the Six-Day War. For Egypt and for the Third World, Nasser was now, despite military defeat, the hero of a political victory. The Non-Aligned Movement, growing since the 1955 Bandung Conference, took on political identity after Suez. The Algerian war of independence accelerated; Ghana gained independence in 1957; the 'Year of Africa' in 1960 produced 17 new states on the continent.

Suez made the real bipolarity of the Cold War visible to the naked eye: the world was now shaped by the United States and the USSR, not by London and Paris. This was the formal funeral of the nineteenth-century 'Concert of Europe.' In Egyptian domestic politics Nasser's prestige peaked; pan-Arab nationalism entered its golden decade (the 1958 United Arab Republic) until its defeat in 1967. For Turkey, the crisis was a two-sided warning: a NATO member inside the Western alliance, yet facing the rising pan-Arab antagonism led by Egypt, Turkey saw the British-backed Baghdad Pact of 1955 corrode (and turn into CENTO after the 1958 Iraqi revolution). The deepest legacy of the Suez Crisis can be summed up in one sentence written less by the fighting than by its diplomatic outcome: the imperial age had ended, the superpower age had begun.