Ayyubid Sultan Saladin had conquered most of the Frankish, Latin Kingdom of Jerusalem, including the ancient city itself, in 1187. The Kingdom had been established 88 years before, after the capture and sack of Jerusalem in the First Crusade, which had been a Byzantine holding prior to the Muslim conquests of the 7th century. The city was sacred to Christians, Muslims and Jews, and returning it to Christian hands had been a primary purpose of the First Crusade. Saladin led a Muslim dynasty, and his incorporation of Jerusalem into his domains shocked and dismayed the Catholic countries of Western Europe. Legend has it that Pope Urban III literally died of the shock, but the timing of his death makes that impossible. The crusader states had been reduced to three cities along the sea coast: Tyre, Tripoli, and Antioch.
The Third Crusade (1189–92) reclaimed an extensive amount of territory for the Kingdom of Jerusalem, including the key towns of Acre and Jaffa, but had failed to retake Jerusalem. The crusade had also been marked by a significant escalation in long standing tensions between the feudal states of western Europe and the Byzantine Empire, centred in Constantinople. The experiences of the first two crusades had thrown into stark relief the vast cultural differences between the two Christian civilisations. The Latins (as the Byzantines referred to them because of their adherence to the Latin Rite) viewed the Byzantine preference for diplomacy and trade over war as duplicitous and degenerate, and their policy of tolerance and assimilation towards Muslims as a corrupt betrayal of the faith. For their part, the educated and wealthy Byzantines maintained a strong sense of cultural, organizational, and social superiority over the Latins.
Constantinople had been in existence for 874 years at the time of the Fourth Crusade and was the largest and most sophisticated city in Christendom. Almost alone amongst major medieval urban centres, it had retained the civic structures, public baths, forums, monuments, and aqueducts of classical Rome in working form. At its height, the city held an estimated population of about half a million people behind thirteen miles of triple walls. Its planned location made Constantinople not only the capital of the surviving eastern part of the Roman Empire but also a commercial centre that dominated trade routes from the Mediterranean to the Black Sea, China, India and Persia.
As a result, it was both a rival and a tempting target for the aggressive new states of the west, notably the Republic of Venice.
One of the leaders of the Third Crusade, Holy Roman Emperor Frederick I Barbarossa, openly plotted with the Serbs, Bulgars, Byzantine traitors, and even the Muslim Seljuks against the Eastern Empire and at one point sought Papal support for a crusade against the Orthodox Byzantines. Crusaders also seized the breakaway Byzantine province of Cyprus; rather than return it to the Empire, Richard I of England sold the island to the Knights Templar. Barbarossa died on crusade, and his army quickly disintegrated, leaving the English and French, who had come by sea, to fight Saladin. In 1195 Henry VI, son and heir of Barbarossa, sought to efface this humiliation by declaring a new crusade, and in the summer of 1197 a large number of German knights and nobles, headed by two archbishops, nine bishops, and five dukes, sailed for Palestine. There they captured Sidon and Beirut, but at the news of Henry's death in Messina along the way, many of the nobles and clerics returned to Europe. Deserted by much of their leadership, the rank and file crusaders panicked before an Egyptian army and fled to their ships in Tyre.
Also in 1195, the Byzantine Emperor Isaac II Angelos was deposed in favour of his brother by a palace coup. Ascending as Alexios III Angelos, the new emperor had his brother blinded (a traditional punishment for treason, considered more humane than execution) and exiled. Ineffectual on the battlefield, Isaac had also proven to be an incompetent ruler who had let the treasury dwindle and outsourced the navy to the Venetians. His actions in wastefully distributing military weapons and supplies as gifts to his supporters had undermined the empire's defenses. The new emperor was to prove no better. Anxious to shore up his position, Alexios bankrupted the treasury. His attempts to secure the support of semi-autonomous border commanders undermined central authority. He neglected his crucial responsibilities for defence and diplomacy. The emperor's chief admiral (his wife's brother-in-law), Michael Stryphnos, reportedly sold the fleet's equipment down to the very nails to enrich himself.