The Republic of Venice in 1416 was juggling several enemies at once. Sultan Mehmed I had ended the Ottoman civil war in 1413 and consolidated his rule, and the Venetians wanted to renew their old treaties with him to protect commerce in the Aegean. Negotiations had been dragging since 1414. Meanwhile Ottoman raids in the Aegean had been escalating. In 1414 they pillaged Negroponte on the Venetian colony of Euboea and took roughly 2,000 captives, of whom only 200 elderly men, women, and children were eventually ransomed; the rest were sold into slavery. In late 1415 an Ottoman fleet of 30 vessels under Cali Bey raided the Cyclades, carrying off most of the inhabitants of Andros, Paros, and Melos. In autumn 1415 another Ottoman fleet of 42 ships tried to intercept a Venetian merchant convoy at Tenedos and, when that failed, ravaged Euboea again. The Venetian Great Council finally appointed Pietro Loredan, an experienced and aggressive captain, with fifteen galleys and instructions that read like contradictions: deliver the ambassadors, but if the Ottomans refuse to negotiate or attack, hit back.

Loredan's fleet reached Tenedos on 24 May 1416 and entered the Dardanelles three days later. As soon as the Venetian galleys came in sight of Gallipoli, Ottoman troops on the shore began firing arrows, including poisoned arrows according to Loredan's letter. He responded with a few cannon shots that drove the soldiers back. The next morning, 28 May, he sent two galleys flying the Banner of Saint Mark toward the harbor to open negotiations. The Ottomans sent 32 ships out to meet them. Loredan withdrew, trying to lure them away from the harbor's protection, and the engagement spread across the strait until the wind shifted and the Ottomans made it back to anchor. That evening the two sides exchanged messengers. The Ottoman commander said he had not realized the Venetians were carrying ambassadors and offered safe passage. The Venetian council of war that night was divided: some captains wanted to attack the disorganized Ottoman fleet in its harbor, on the grounds that many of its rowers were Christian galley slaves who would defect. Loredan refused to disregard his orders. The two fleets watched each other through the night.

On the morning of 29 May, Loredan led his ships toward Gallipoli to take on water, in accordance with the previous evening's agreement, while keeping three galleys in reserve. The Ottoman fleet sailed out to meet them and one of their galleys fired cannon shots at the Venetians. The Byzantine historian Doukas, writing decades later, claimed the battle began when a Venetian galley pursued a merchant ship and an Ottoman galley moved to defend it; the two larger fleets each thought the other had attacked first. Loredan's letter does not mention this version. Whatever started it, the fight became a general engagement, and the Venetians won decisively. Loredan's flagship took the lead Ottoman galley after a sharp fight in which he was wounded twice. The galley from Naples under Girolamo Minotto, which had been struggling to keep formation, somehow ended up capturing the Ottoman flagship. Loredan reported six great galleys and nine galleots taken, 1,100 prisoners, twelve Venetian dead, 340 wounded. The Egyptian chronicler Maqrizi puts Ottoman dead at 4,000.

After the battle, the Venetians retired about a mile from Gallipoli and tended to their wounded. The captive Ottoman crews included many Christians from Genoa, Catalonia, Crete, Provence, and Sicily who had served the Ottoman fleet voluntarily. Loredan and his officers identified them, and they were hanged from the yardarms as renegades. A man named Giorgio Calergi, who had participated in a Cretan revolt against Venice, was quartered on the deck of the flagship. The Christian galley slaves who had been forced to row for the Ottomans, however, were freed. Doukas, writing from Constantinople, places these executions at Tenedos rather than Gallipoli but agrees on what happened. The brutality of the post-battle executions was understood by everyone involved as a function of fifteenth-century maritime law: a Christian who served Muslim power voluntarily was a renegade, and renegades hanged. The Ottoman captives proper were taken to Tenedos as prisoners. Loredan's brother sailed for Negroponte with the more seriously wounded. The Venetian commander then turned around and went back to Gallipoli to insist that the Ottoman commander honor the original agreement and let the embassy through.

The aftermath was a diplomatic mess. The provveditore Dolfino Venier reached the sultan's court at Adrianople in late July and signed an agreement on 31 July that included mutual return of prisoners. The Venetian Senate refused to ratify it, principally because returning the 1,100 Ottoman naval crewmen would put them straight back into the sultan's fleet. Venier was tried for exceeding his brief and was eventually acquitted. The conflict dragged on intermittently until November 1419, when a peace was finally signed at Constantinople, including the prisoner exchange Venice had been so determined to avoid. The Venetian victory at Gallipoli ensured Venetian naval superiority in the Aegean for decades, but as the historian Seth Parry has noted, it also bred complacency. When the Ottomans came back at sea later in the century, the Venetians would learn that naval superiority did not guarantee anything in the eastern Mediterranean. None of this is the WWI Gallipoli campaign, which would happen in the same waters five hundred years later, with much larger fleets, much greater bloodshed, and much smaller margins.