The outbreak of war between Austria and Prussia in June 1866 diverts attention from Rome to Venice.

The Italian government under Alfonso La Marmora, taking advantage of Vienna's problems elsewhere, attacks Austrian-held Venetia, only to be defeated on land at Custoza on June 25.

The Austrian fleet under Wilhelm von Tegetthoff meets the Italian fleet of Carlo di Persano Italians in the Battle of Lissa on July 20.

Tegetthoff had been appointed commander of the Austrian battle fleet on May 9, 1866, shortly before the war began.

Although the Italian fleet is larger and more powerful, Tegetthoff had decided to engage it after a successful reconnaissance of the Italian base of Ancona on June 27, 1866.

With their army suffering defeats against the Austrians during the first week of the war from June 20 to 27, 1866, the Italians had sought a victory over the Austrian navy by sending their fleet against the Austrian naval base at Lissa, off the coast of Dalmatia near Spàlato (Split) on July 16, 1866.

Encountering the Italian fleet early on the morning of July 20, Tegetthoff had sailed straight for the center of the Italian fleet, hoping to ram the ships to make up for his own fleet's lack of firepower (Rammstosstaktik).

The smoke from the Italian ships made visibility very poor, however, and the Austrians had missed the Italian fleet completely.

Swinging around, Tegetthoff again charged, this time setting two Italian armored ships on fire and damaging several more.

After Tegetthoff's flagship, the Erzherzog Ferdinand Max, rams and sinks the armored Italian frigate Re d'Italia, the Italian fleet retreats the next day.

Tegetthoff returns in triumph to his base at Pola.

Nevertheless, his victory does not materially affect the outcome of the war, as Italy's alliance with Prussia ensures an advantageous peace.

Tegetthoff is immediately promoted, by telegraph, to Vizeadmiral (Vice Admiral).

He receives congratulatory telegrams from Ferdinand Maximilian, the embattled Emperor of Mexico, and Vizeadmiral Hans Birch Dahlerup, former Oberkommandant der Marine (High Commandant of the Navy).

Tegetthoff is decorated with the Commander's Cross of the Military Order of Maria Theresa and made honorary citizen of Vienna.

His counterpart, Persano, will be condemned for incapacity, and discharged.

A few Garibaldian volunteers operating in the Trento area are the sole Italians to achieve some moderate success.

Garibaldi's "Hunters of the Alps" defeats the Austrians at the Battle of Bezzecca, on July 21, conquer the lower part of Trentino, and move towards Trento.

Prussian peace with Austria forces the Italian government to seek an armistice with Austria, on August 12.

Austria cedes Venetia to France according to the Treaty of Vienna, signed on October 12, which in turn cedes it to Italy.