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Map of the Innviertel, 1779

The Treaty of Teschen (German language: Frieden von Teschen, i.e., Peace of Teschen) was signed on May 13, 1779, in Cieszyn (Teschen), Austrian Silesia, between Austria and Prussia, which officially ended the War of the Bavarian Succession sparked by the death of Elector Maximilian III Joseph. Holy Roman Emperor, Joseph II of Austria, sought to acquire most of Bavaria and the Upper Palatinate upon the death of Maximilian III, whose sister, Maria Josepha, was his wife until her death in 1767. The direct heir was Charles IV Theodore and he was amenable to an agreement with Joseph II that would allow him to acquire parts of the Austrian Netherlands in exchange. However, Charles Theodore had no legitimate heirs so his successor was his cousin, Charles II August, Duke of Zweibrücken. Charles August objected to the agreement depriving him of the Bavarian inheritance and appealed to the Reichstag in Regensburg. His cause was taken up by Prussia, which feared any increase in Austrian territory, and by Saxony, whose Wettin royal house was married into the Wittelsbach family and therefore had allodial claims to parts of the inheritance. The War of the Bavarian Succession broke out after Austria and Prussia could not negotiate their differences. The war was a stalemate as the Prussians were not able to advance far into Bohemia or Austria, but the Austrians were unwilling to invade Saxony or Prussia. This was partly because Maria Theresa, the mother of Joseph II and his co-ruler as Queen of Bohemia and Archduchess of Austria was firmly against the war after it became clear that a stalemate prevailed. She dispatched peace initiatives to Frederick II of Prussia and forced Joseph II to accept mediation by France and Russia. The peace came at the initiative of Empress Catherine II of Russia and was guaranteed by both Russia and France.

The accord dictated that the Archduchy of Austria (Principality of Austria above the Enns) would receive the Bavarian lands east of the Inn river in compensation, a region then called "Innviertel", stretching from the Bishopric of Passau to the northern border of the Archbishopric of Salzburg. However, one of the requirements was that Austria would recognize the Prussian claims to the Franconian margraviates of Ansbach and Bayreuth, ruled in personal union by Margrave Christian Alexander from the House of Hohenzollern. Prussia finally purchased both margraviates in 1791. The Electorate of Saxony received a sum of six million guilders (florins) from Bavaria in exchange of its inheritance claims. With the accession of Elector Charles Theodore, the electorates of Bavaria and the County Palatine of the Rhine (i.e. the territories in the Rhenish Palatinate and the Upper Palatinate) were under the united rule of the House of Wittelsbach. Their electoral votes were combined into one per a provision in the earlier Treaty of Westphalia in 1648, thereby reducing the number of electorates in the Holy Roman Empire to eight. The Innviertel, except for a short time during the Napoleonic Wars, has remained with Upper Austria up to today.

In 1785 Maria Theresa's son and successor Emperor Joseph II of Austria made another try at attaching the Bavarian lands to his Habsburg possessions, and even contracted with Elector Charles Theodore to swap it for the Austrian Netherlands. However, Joseph II again did not agree to a full exchange of all provinces within the Austrian Netherlands and the agreement collapsed amidst tacit French opposition and overt Prussian hostility. These plans were however once again frustrated by King Frederick II of Prussia, who raised the opposition by the Fürstenbund, an association of several Imperial princes. After the War of the Austrian Succession and the Seven Years' War, the Austrian House of Habsburg was no longer able to exercise its Imperial power against Prussian resistance.

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