In 1814, he organized the League of the Free Peoples, of which he was declared Protector. In 1815, he liberated Montevideo from the control of the "Unitarians", Buenos Aires.
In 1815, he attended the Proto-congress of the Independence of Argentina. It was here the provinces of the Oriental Province (today Uruguay), Córdoba, Corrientes, Entre Ríos, Misiones and Santa Fe declared themselves independent from Spain and formed the "Federal League". The league invited other provinces of the former Viceroyalty of Rio de la Plata to join them under a federal system.
Also at this congress, Artigas ratified the use of the flag created by Manuel Belgrano (which would later become the flag of the Argentine Republic), but added a diagonal festoon in red, the color of federalism in Argentina.
The growth of influence and prestige of the Federal League frightened the governments in Buenos Aires and Portugal. In August 1816, Portugal invaded the Eastern Province, with the intention of destroying Artigas and his revolution.
Portuguese forces, led by Carlos Frederico Lecor, conquered Artigas and his deputies and occupied Montevideo on 20 January 1817, but the struggle continued for three years in the country. Infuriated by Buenos Aires's passivity, Artigas declared war on Buenos Aires. His subordinates, members of the Federal League -- Francisco Ramírez, governor of Entre Ríos, and Estanislao López, governor of Santa Fe -- managed to defeat the centralism of Buenos Aires. But hope for a new nation was short-lived; both commanders entered agreements with Buenos Aires that went against the principles of Artigas. They rebelled against him and left him to be crushed by the Portuguese.
Without resources and men, Artigas withdrew to Paraguay in September 1820. In Paraguay, Dr. Francia, the dictator, banished him to Candelaria. He then disappeared from the political life of the region.
After a long exile, he died in Paraguay in 1850. It is said that Artigas, feeling near death, asked for a horse and died in the saddle, as a gaucho.