Henry VII was the founder of the Tudor dynasty, unifying the warring factions in the Wars of the Roses. Although supported by Lancastrians and Yorkists alienated by Richard III's deposition of his nephew, Edward V, Henry VII's first task was to secure his position. In 1486 he married Elizabeth of York, eldest daughter of Edward IV, thus uniting the Houses of York and Lancaster but making sure that the evidence adduced in 1483 for the illegitimacy of Edward IV's children was suppressed.

Henry's reign (1485-1509) was troubled by revolts, sometimes involving pretenders (such as Perkin Warbeck and Lambert Simnel) who impersonated Edward V or his brother. With this in mind, in 1485, Henry formed a personal bodyguard from his followers known as the 'Yeomen of the Guard' (the oldest military corps in existence today).

Henry strengthened the power of the monarchy by using traditional methods of government to tighten royal administration and increase revenues (reportedly including a daily examination of accounts).

Royal income rose from an annual average of £52,000 to £142,000 by the end of Henry's reign. Little co-operation between King and Parliament was required; during Henry's reign of 24 years, seven Parliaments sat for some ten and a half months.

Henry used dynastic royal marriages to establish his dynasty in England and help maintain peace. One daughter, Margaret, was married to James IV of Scotland (from whom Mary, Queen of Scots and her son, James VI of Scotland and James I of England, were descended); the other daughter married Louis IX of France.

Henry spent money shrewdly and left a full treasury on his death in 1509.