The Peace of Nicias was a peace treaty signed between the Greek city-states of Athens and Sparta in March 421 BC that ended the first half of the Peloponnesian War.

In 425 BC, the Spartans had lost the battles of Pylos and Sphacteria, a severe defeat resulting in the Athenians holding 292 prisoners. At least 120 were Spartiates, who had recovered by 424 BC, when the Spartan general Brasidas captured Amphipolis. In the same year, the Athenians suffered a major defeat in Boeotia at the Battle of Delium, and in 422 BC, they were defeated again at the Battle of Amphipolis in their attempt to take back that city. Both Brasidas, the leading Spartan general, and Cleon, the leading politician in Athens, were killed at Amphipolis. By then, both sides were exhausted and ready for peace.

The treaty was signed with the agreement of both Sparta and Athens, considering the disadvantages faced by both polis during the first Peloponnesian War. The Athenians were motivated after they lost the Battle of Delium and the Battle of Amphipolis, which eroded their confidence in military strength. They were also concerned about their allies, worrying that they may be emboldened by the loss of Athens, potentially leading to a rebellion among them. The Athenian regretted not reaching an agreement earlier when a favourable opportunity for a peace treaty was offered by Sparta during the Battle of Pylos.

From Sparta’s perspective, the failures in battles caused them to lose confidence and feel stressed about the future trajectory of the Peloponnesian War, while the new threat resulting from the termination of the peace treaty with the Argives further heightened Spartan's willingness to pursue peace. For the Spartans, the failure of the yearly invasion tactic had extended the war beyond Sparta's expectation, and the losses at Pylos and Cythera, had made Sparta ready for peace. Also, Sparta had a strong incentive for peace, given its significant disadvantage position in the Peloponnesian War after the death of Brasidas. The morale of the Spartans suffered greatly from the loss of soldiers and Brasidas since their chances of winning the war had diminished, and they were unable to execute any of Brasidas’s plans with their own forces. As a result, the Spartans strongly desired peace compared to the beginning of the war.

Furthermore, the thirty-year peace treaty with Argos was about to expire, and the Argives (inhabitants of Argos) refused to sign another truce unless Cynuria, a contested border region between Sparta and Argos, was restored to them. The Spartans calculated that it would be difficult to win both wars against the Athenians and the Argives at the same time. Moreover, they anticipated potential uprisings by some of the cities in Peloponnesus against the Argives based on past experience. Therefore, the immense loss and stress faced by Sparta easily pushed them to negotiate with Athens to restore their military power, and prevent attacks from both Athens and Argos.

Within these situations faced by Sparta and Athens, both poleis were probably weary by 421, and were willing to let the war end in a deadlock, until they could restore allies from different peninsulas affected by the war. This viewpoint is reinforced by clear evidence that neither Athens nor Sparta had managed to strike their opponent with a fatal blow in a decade of scattered battling, and such a blow did not appear in a short while.

The negotiations were started by Pleistoanax, King of Sparta, and Nicias, an Athenian general. The most amicable proposal was to return everything to the prewar state except for Nisaea and Plataea. Athens would retain control of Nisaea and Thebes would retain control over Plataea. Amphipolis would be returned to Athens and Pylos would be returned to Sparta. Athenians would release the Spartan prisoners taken at Sphacteria and Sparta together with Thebes would return Athenian prisoners. Temples throughout Greece would be open to worshipers from all cities, and the oracle at Delphi would regain its autonomy. Athens would continue to collect tribute from the states from which it had received it since the time of Aristides, but Athens could not force them to become allies. Athens also agreed to come to Sparta's aid if the helots revolted. Few of Sparta's allies agreed to sign the peace. Boeotia, Corinth, Elis, Megara and Amphipolis opposed the treaty.

It is noted that some poleis declared neutrality to prevent being involved in the conflicts between Sparta and Athens. The Peace of Nicias designated 6 cities as neutral to ensure their safety by preventing reprisals from the Athenians. According to Thucydides; Argilus, Stagirus, Acanthus, Stolus, Olynthus and Spartolus were listed as neutral cities, not aligning themselves with either Sparta or Athens in the peace treaty. However, it was specified that if the Athenians were successful in convincing these cities, it would be legitimate for them to form allies with these cities, respecting their wills and autonomy. It is suggested that the declaration of neutrality by these six cities in the Peace of Nicias has largely been seen as a temporary compromise aimed at safeguarding against Athenian revenge following Sparta's retreat from Thrace.