Originating from conflicting state and federal legislation passed between 1787 and 1805, the dispute resulted from poor understanding of geographical features of the Great Lakes at the time. Varying interpretations of the law caused the governments of Ohio and Michigan to both claim sovereignty over a region along the border, now known as the Toledo Strip. When Michigan petitioned for statehood in 1835, it sought to include the disputed territory within its boundaries; Ohio's congressional delegation was in turn able to stall Michigan's admission to the Union.
Beginning in 1835, both sides passed legislation attempting to force the other side's capitulation. Ohio's governor Robert Lucas and Michigan's 24-year-old "Boy Governor" Stevens T. Mason were both unwilling to cede jurisdiction of the Strip, so they raised militias and helped institute criminal penalties for citizens submitting to the other's authority. The militias were mobilized and sent to positions on opposite sides of the Maumee River near Toledo, but besides mutual taunting there was little interaction between the two forces. The single military confrontation of the "war" ended with a report of shots being fired into the air, incurring no casualties.
During the summer of 1836, Congress proposed a compromise whereby Michigan gave up its claim to the strip in exchange for its statehood and approximately three-quarters of the Upper Peninsula. The compromise was considered a poor outcome for Michigan; nearly all of the Upper Peninsula was still Indian territory at the time. Voters in a state convention in September soundly rejected the proposal.
In December 1836, the Michigan government, facing a dire financial crisis and pressure from Congress and President Andrew Jackson, called another convention (called the "Frost-bitten Convention") which accepted the compromise that resolved the Toledo War. The later discovery of copper and iron deposits and the plentiful timber in the Upper Peninsula more than offset Michigan's economic loss in surrendering Toledo.