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Asia
June 10 – Third Crusade: Frederick I Barbarossa drowns in the Saleph River while leading an army to Jerusalem.
November 24 – Isabella of Jerusalem marries Conrad of Montferrat at Acre, making him de jure king.
The Teutonic Knights are founded to defend the Latin states in the Levant.
In Myanmar, Anawrahta's lineage regains control with the assistance of Sri Lanka. Pagan has been in anarchy. The new regime reforms Burmese Buddhism on Sri Lankan Theravada models.
Europe
February – Anti-Jewish riots break out in England.
March 16 – A massacre and mass-suicide of the Jews of York, England, led by Richard Malebys, result in the deaths of 150–500 Jews in Clifford's Tower.
July 4 – Richard I of England and Philip II of France, having met at Vézelay, set out from Marseille to join the Third Crusade.
October 4 – Richard I of England threatens war against Tancred of Sicily, and captures Messina.
Battle of Stara Zagora: The Bulgarians defeat Byzantine Emperor Isaac II.
The Almohad caliph, Yaqub al-Mansur, fails to reconquer Silves, Portugal.
Henry I becomes Duke of Brabant.
Arts
On the Harmony of Religions and Philosophy (ar. Kitab fasl al-maqal), by Averroes, is first published.
Speculum Virginum, a German manuscript, is published (approximate date).
Education
First known foreign scholar commences study at what will become the University of Oxford in England, Emo of Friesland.
Religion
Cartmel Priory is founded in England.
Stefan Nemanja founds the Studenica monastery in Serbia.
Asia
July 12 – Saladin's garrison surrenders, ending the two-year siege of Acre. Conrad of Montferrat, who has negotiated the surrender, raises the banners of the Kingdom of Jerusalem and of the Third Crusade leaders Richard I of England, Philip II of France, and Leopold V of Austria on the city's walls and towers. Richard stays to push on to Jerusalem, but Philip returns to France to take possession of a part of Flanders whose count had died at the siege of Acre. Back in France, Philip also schemes with Richard's brother, John of England, to dispossess Richard of his French lands while he is still away, but the intervention of John's (and Richard's) mother, Eleanor of Aquitaine, foils the plan.
September 7 – Richard I of England defeats Saladin at the Battle of Arsuf in Palestine during the Third Crusade.
Khmer King Jayavarman VII sacks the capital of Champa.
First recorded administration of the Taungoo region in modern-day Myanmar when Pagan King Narapatisithu appoints a son-in-law, Ananda Thuriya, to be governor of Kanba Myint.
Europe
April 17 – Tusculum is destroyed by the army of the Commune of Rome.
May 12 – Richard I of England marries Berengaria of Navarre.
Henry VI, Holy Roman Emperor is crowned by Pope Celestine III.
Duke Berthold V of Zähringen founds the city of Bern (present-day Switzerland).
After having failed in their endeavor the year before, the Almohads reconquer the city of Silves in Portugal. In the same campaign, the Almohads take also Alcácer do Sal while Palmela and Almada are sacked.
In August, Sicilians defeat an invasion of Emperor Henry VI and capture Empress Constance.
Technology
The first reference to a windmill in Europe is made by a Dean Herbert of East Anglia, whose mills are supposedly in competition with the abbey of Bury St Edmunds. This is probably an invention imported from interaction with the Muslim world, since the first windmills were most likely innovated from the Bana Musa brothers in the Islamic Middle East during the middle 9th century. The windmill will spread in the other direction, to be introduced to China by as early as 1219.
Religion
April 14 – Pope Celestine III succeeds Pope Clement III as the 175th pope.
November 27 – Reginald Fitz Jocelin is elected Archbishop of Canterbury.
Eisai founds the Rinzai Zen sect in Japan.
The monks of Glastonbury Abbey dig up the remains of a large knight and a blonde woman and announce to have discovered the tomb of King Arthur and Queen Guinevere.
January 7 – Venus occults Jupiter.
April 28 – Conrad of Montferrat (Conrad I), King of Jerusalem, is assassinated in Tyre, only days after his title to the throne is confirmed by election. The killing is carried out by Hashshashin.
August 21 – Minamoto no Yoritomo is granted the title of shogun, thereby officially establishing the first shogunate in the history of Japan.
October 9 – The Third Crusade ends. Richard I of England and Saladin negotiate visiting rights for pilgrims to come to the Holy City of Jerusalem. Richard leaves the Holy Land later this month.
December 11 – Returning from the Crusade, Richard I of England is taken prisoner by Leopold V, Duke of Austria, and secured at Dürnstein.
Second Battle of Tarain in India.
Marco Polo Bridge, or Lugouqiao, is completed in Beijing.
Empress Constance, captured by Sicilians in 1191, is released under the pressure of the Pope and returns to Germany.
Prince Yaroslav Vladimirovich of Novgorod burns down Tartu and Otepää Castles in Estonia.
January 1 – Enrico Dandolo becomes Doge of Venice.
February 14 – Richard I of England, previously imprisoned on his return from the Third Crusade by his personal enemy Leopold V, Duke of Austria, is handed to custody of Henry VI, Holy Roman Emperor, and moved to Speyer.
March 4 – Death of Saladin at Damascus. The lands of the Kurdish Ayyubid dynasty of Egypt and Syria are split among his descendants.
August 15 – Philip II of France marries Ingeborg, daughter of Valdemar I of Denmark.
Qutb al-Din Aibak, a Ghurid slave commander, captures Delhi.
Muhammad bin Bakhtiyar Khilji, a general under the command of Qutb al-Din Aibak, sacks and burns the ancient college-city of Nalanda, India's greatest Buddhist seat of learning, and the university of Vikramashila.
Northern Crusades: Pope Celestine III calls for a crusade against those he regards as pagans in the Baltic region of northern Europe.
February 4 – King Richard I of England is ransomed from Henry VI, Holy Roman Emperor.
c. February 10 – Henry Marshal is nominated Bishop of Exeter in England.
March 10 – Sultan Toghrul III is defeated and killed in battle with Ala ad-Din Tekish near Rey in Persia, ending the Seljuq dynasty of Hamedan; the Great Seljuq Empire passes to the Khwarazmian dynasty.
March 12–28 – King Richard returns to England and besieges Nottingham Castle to reclaim it from his brother John.
April 17 – Second coronation of Richard I at Winchester.
May 2 – The port of Portsmouth in England is granted a Royal Charter.
May 12 – After settling affairs in England, Richard I leaves for Barfleur in Normandy to reclaim lands lost to Philip II of France.
June 10 – A fire at Chartres Cathedral leads to the start of its rebuilding.
July 3 – Battle of Fréteval: Richard I of England reconquers his French fiefdoms from Philip II.
July 5 – Emperor Guangzong of Song China is forced to give up his throne.
November 20 – Palermo in Sicily falls to Henry VI, Holy Roman Emperor.
December 25 – Henry VI is crowned king of Sicily.
The Danes attack Estonia.
Ordinance of the Jewry in England: Strict records are to be kept of financial transactions by Jews in England for taxation purposes.
The Yellow River of China experiences a major course change, taking over the Huai River drainage system for the next 700 years.
Beginning of a three-year famine in Northern France due to catastrophic rains and hail storms.
Hunac Ceel drives the Itza out of Chichen Itza, forcing them to start the Itza Kingdom on Lake Peten Itza.
June 1 – Georgians defeat the Ildenizids of Azerbaijan in the Battle of Shamkor.
July 18 – Battle of Alarcos: Almohad ruler Abu Yusuf Ya'qub al-Mansur decisively defeats Castilian King Alfonso VIII.
The Priory of St Mary's is founded in Bushmead.
Alexius III Angelus overthrows Isaac II and becomes Byzantine Emperor.
England is struck by a pestilence and a resulting famine
Spring – In London, a popular uprising of the poor against the rich is led by William Fitz Osbern.
Upon the death of Knut Eriksson, he succeeded peacefully as king of Sweden by his rival Sverker the Younger.
According to a popular legend, Prince Madog of Gwynedd reaches North America in what is present-day Alabama.
Stefan Prvovencani becomes Grand Župan of Serbia.
General Ch'oe Ch'ung-hon takes control in Korea.
First recorded use of "Katherine" as a female first name in England.
Asia
Genghis Khan defeats the Jurkins. Mukhali's father gives him and his brother to Genghis Khan as personal hereditary slaves.
Amalric II succeeds Henry II of Champagne as King of Jerusalem.
Europe
Theobald III becomes Count of Champagne.
Kaloyan becomes Tsar of Bulgaria.
Corfu is occupied by the Genoese.
Hubert Walter, Archbishop of Canterbury, negotiates a peace with Wales.
North Crawley is split into Great Crawley and Little Crawley.
Philip of Swabia marries Irene Angelina, daughter of Byzantine emperor Isaac II.
The Danes attack Estonia.
Saracen pirates, from the Balearic Islands, raid the city of Toulon in Provence and the benedictine monastery of Saint Honorat on the Lérins Islands.
Market
Rainy weather causes the harvest to fail in western Europe. One of the worst famines of the century ensues.
Religion
Arbroath Abbey is consecrated, and dedicated to St. Thomas Becket.
Asia
Emperor Tsuchimikado succeeds Emperor Go-Toba on the throne of Japan.
Europe
March – Philip of Swabia is elected King of Germany by his supporters.
July – Otto of Brunswick is crowned King of Germany by the House of Welf.
Frederick II, infant son of German King Henry VI, is crowned King of Sicily.
John of England captures a party of eighteen French knights & many men-at-arms in the ongoing conflict against France. King Richard I of England introduces a new Great Seal in an attempt to keep the war against France funded. The government proclaims that charters previously struck with the old seal are no longer valid and must be renewed with a fresh payment. The office of Lord Warden of the Stannaries is also introduced to tax the produce of tin mines in Cornwall and Devon.
Religion
January 8 – Pope Innocent III succeeds Pope Celestine III to become the 176th pope. He immediately lays an interdict on Laon in an attempt to stamp out independent beliefs there. This will be followed by interdicts against France in 1199 and Normandy in 1203.
January 13 – Short-lived truce between England and France.
March 25 – King Richard I of England is shot in the left shoulder with a crossbow by French boy Pierre Basile at the siege of the castle of Châlus in France. The war between the kingdoms of England and France has become so brutal that Hugh of Lincoln is warned that "nothing now is safe, neither the city to dwell in nor the highway for travel".
April 6 – King Richard I of England dies from gangrene caused by his crossbow wound. His younger brother, John, becomes king of England. Richard's jewels are left to his nephew, Otto, King of the Romans. As a result of Richard's death, French soldier Mercadier has Pierre Basile flayed alive and hanged.
King Philip II of France renews his war against John, King of England, supporting the rival claim to the English throne of Arthur I, Duke of Brittany.
St Laurence's Church, Ludlow, in England is rebuilt.
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