Reconquista
In 1174, he ceded Uclés to the Order of Santiago and afterwards this became the order's principal seat. From Uclés, he began a campaign which culminated in the reconquest of Cuenca in 1177. The city surrendered on 21 September, the feast of Saint Matthew, ever afterwards celebrated by the citizens of the town.
Alfonso took the initiative to ally all the major Christian kingdoms of the peninsula — Navarre, León, Portugal, and Aragon — against the Almohads. By the Treaty of Cazola of 1179, the zones of expansion of each kingdom were defined.
After founding Plasencia (Cáceres) in 1186, he embarked on a major initiative to unite the Castilian nobility around the Reconquista. In that year, he recuperated part of La Rioja from the Kingdom of Navarre.
In 1195, after the treaty with the Almohads was broken, he came to the defence of Alarcos on the river Guadiana, then the principal Castilian town in the region. At the subsequent Battle of Alarcos, he was roundly defeated by the caliph Abu Yaqub Yusuf al-Mansur. The reoccupation of the surrounding territory by the Almohads was quickly commenced with Calatrava falling first. For the next seventeen years, the frontier between Moor and Castilian was fixed in the hill country just outside Toledo.
Finally, in 1212, through the mediation of Pope Innocent III, a crusade was called against the Almohads. Castilians under Alfonso, Aragonese and Catalans under Peter II, Navarrese under Sancho VII, and Franks under the archbishop of Narbonne, Arnaud Amalric, all flocked to the effort. The military orders also lent their support. Calatrava first, then Alarcos, and finally Benavente were captured before a final battle was fought at Las Navas de Tolosa near Santa Elena on 16 July. The caliph Muhammad an-Nasir was routed and Almohad power broken.
Read more about this topic: Alfonso VIII Of Castile