The detail
By the early 16th century there were widespread calls for "reform in head and members": complaints about clerical ignorance and abuses, the fiscal demands of the papacy, and the gap between popular piety and Scripture. Humanists such as Erasmus promoted a return to the sources, including the Greek New Testament (1516), and the printing press allowed ideas to spread at unprecedented speed. Politically, the Holy Roman Empire was a patchwork of princes and free cities with their own interests, which made it hard for emperor or pope to impose a single solution.
The immediate trigger was the preaching of an indulgence to finance the rebuilding of St Peter's in Rome. On 31 October 1517 Martin Luther, an Augustinian friar and professor at Wittenberg, sent his Ninety-five Theses to Archbishop Albert of Mainz (the tradition that he nailed them to the church door is debated). Over the next years his theology developed: justification by grace through faith alone, the supreme authority of Scripture over popes and councils, the priesthood of all believers, and a reduction of the sacraments to those he saw instituted by Christ (above all baptism and the Lord's Supper). After the Leipzig Disputation (1519), Leo X threatened excommunication in Exsurge Domine (1520) and excommunicated him in Decet Romanum Pontificem (1521); at the Diet of Worms (1521) Luther refused to recant and was outlawed by the Edict of Worms.
The movement soon diversified. In Zurich, Huldrych Zwingli led a parallel reform from 1519; Luther and Zwingli failed to agree on Christ's presence in the Lord's Supper at Marburg (1529), a split that shaped the Lutheran and Reformed traditions. John Calvin later gave the Reformed tradition its most influential systematic form in Geneva. Lutheran princes presented the Augsburg Confession to Charles V in 1530. After decades of conflict, the Peace of Augsburg (1555) let each ruler choose between Catholicism and Lutheranism for his territory (later summarised as cuius regio, eius religio); Reformed Christians were recognised only at the Peace of Westphalia (1648).
The Catholic Church responded with the Council of Trent (1545–1563), which defined its teaching on Scripture and tradition, justification, the seven sacraments and the sacrifice of the Mass, and launched an extensive programme of reform (seminaries, residence of bishops, catechisms). Religious conflict mixed with dynastic and national rivalries in the wars of religion, culminating in the Thirty Years' War (1618–1648). The Orthodox Church observed the controversy from outside; the correspondence between Patriarch Jeremias II and Lutheran theologians of Tübingen (1573–1581) concluded that they did not share the same faith.
How each side tells it: Protestant narratives see a recovery of the gospel of grace and the authority of Scripture, against accumulated human traditions and abuses. Traditional Catholic narratives saw a revolt that broke the unity of the Church and of doctrine; modern Catholic historiography usually acknowledges real abuses and the religious seriousness of the reformers, while holding that the division wounded the Church and that Trent preserved apostolic teaching. Orthodox writers often regard both sides as sharing Western, Augustinian premises. Ecumenical dialogue has produced notable agreements, especially the Joint Declaration on the Doctrine of Justification signed by the Lutheran World Federation and the Catholic Church (1999), later affirmed by Methodists (2006), Reformed (2017) and Anglicans (2016–2017), and the joint Catholic–Lutheran commemoration at Lund (2016). Important differences remain on authority, the sacraments and ministry.