A naval arms race between the Austrian Empire and Italy began in the 1860s when both ordered a series of ironclad warships, steam-propelled vessels protected by iron or steel armor plates and far more powerful than all-wood ships of the line. These ships were constructed to establish control over the Adriatic Sea in the event of a conflict between the two countries.
The unification of much of Italy in this time period resulted in the amalgamation of the various navies of the former Italian states into the Regia Marina (Royal Navy). The Sardinian component included two Formidabile-class ironclads, ordered from France in 1860, which became Italy's first broadside ironclads. The country quickly began a substantial construction program to bolster the Regia Marina, as the Italians believed that a strong navy would play a crucial role in making the recently unified kingdom a great power.
These actions captured the attention of the Austrian Empire, which viewed Italy with great suspicion and worry, as irredentist claims by Italian nationalists were directed at key Austrian territories such as Venice, Trentino, and Trieste. In response to the growing strength of Sardinia—soon to be Italy—the Imperial Austrian Navy ordered two Drache-class ironclads in 1860. This began a naval arms race between Austria and Italy, centered around the construction and acquisition of ironclads. This continued for the next six years, and by the time the war broke out between the two in 1866, Austria possessed seven ironclads to Italy's twelve.
While Italy emerged on the winning side of the war and acquired the Kingdom of Lombardy–Venetia under the terms of the Treaty of Vienna, the Regia Marina was decisively defeated at the Battle of Lissa by the much smaller Imperial Austrian Navy. Their poor performance led to a period of neglect with reduced naval budgets and a halt to new ship construction; Italy would not have another ironclad laid down until 1873.
Meanwhile, Austria reformed itself into the Austro-Hungarian Empire in 1867 after losing the Seven Weeks War to Prussia. In the years following the Battle of Lissa, Wilhelm von Tegetthoff would oversee the construction of three additional ironclads and the rebuilding of a fourth. After Tegetthoff's death in 1871, the Austro-Hungarian Navy entered its own period of neglect, with just five additional ironclads being constructed in the ensuing thirteen years. Both navies engaged in further construction projects throughout the 1870s and early 1880s, but the arms race ended in the 1880s due to the signing of the Triple Alliance between Italy, Austria-Hungary, and Germany in 1882 and the introduction of new technologies that led to the development of pre-dreadnought battleships. Despite their alliance, however, Italy and Austria-Hungary would engage in a second naval arms race centered around the construction of battleships at the turn of the century. This arms race would continue until the beginning of World War I.