From the mid-sixteenth century, the Sephardic diaspora began to change shape dramatically, as the steady stream of refugees from the Peninsula was largely diverted from its earlier Mediterranean destinations. This shift was primarily a response to economic and political developments in northern Europe. By this time, the ports of the Atlantic coast had begun their dizzying rise to commercial prominence. The importance of stimulating economic growth in the increasingly competitive political atmosphere of the early modern Atlantic states led to a gradual shift in attitudes to Jewish settlement among rulers and bureaucrats. Conversos escaping the Peninsula began to settle in the guise of practicing Catholics in Antwerp, Bordeaux, Bayonne, Rouen, Nantes and London. Since their mercantile skills were recognized, rulers were largely (though not invariably) willing to ignore the considerable evidence that these “New Christians” were secretly practicing Judaism. Even in Antwerp, which was under Spanish rule, there was a certain flexibility; although the New Christian merchants there were technically subject to the Inquisition, some measures were taken to guarantee their protection as early as 1526. There was a similar development in France, where settlement by Jews had long been prohibited. In 1550, Henri II issued lettres patentes offering favorable terms of settlement to New Christians from the Peninsula; despite occasional threats and molestations, New Christians steadily continued to settle in southwest France from this time onward. Unlike the exiles and conversos who settled in the Mediterranean region, who upon arrival became part of an established Jewish world, the crypto-Jews who settled in northern Europe took up residence in areas with no Jewish population at all. These immigrants were pioneers in the re-establishment of Jewish life in areas of Europe where Jewish settlement had been forbidden since the medieval expulsions.

Towards the end of the sixteenth century, as the revolt of the Dutch against their Spanish masters became recognized as an irreversible transformation, converso merchants began to turn their eyes to the rapidly developing commercial centers of the Netherlands, particularly Amsterdam. From about 1595, converso families began settling in Amsterdam, initially as practicing Christians. They soon discovered they were able to live as professing Jews, and were perhaps more welcome as such in the Calvinist-dominated Netherlands than as Iberian Catholics. The rapid growth of the community in Amsterdam was encouraged by the exceptionally tolerant attitude of the authorities and the local populace. During the Twelve Years Truce with Spain (1609-1621), as many as fifty “Portuguese” families a year made their way to Amsterdam. Leaders of the new community invited rabbis from Mediterranean Sephardic communities to aid in the process of the “re-judaization” of their ex-converso members. From the start, however, the community was dominated by its wealthy merchants, usually active in Atlantic trade. It was not, however, a community of wealthy merchants alone; it absorbed large numbers of poor ex-converso refugees from Spain and Portugal, who were supported by an elaborate welfare system. By the mid-seventeenth century, Amsterdam’s Jewish printing presses were among the most active in Europe, supplying not only traditional Hebrew texts, but also manuals of Jewish practice for neophytes, literary works in Spanish and Portuguese, and original apologetic texts. By the second half of the seventeenth century, Amsterdam had become an enormously important Sephardic center, perhaps rivaling Venice; it had a population of about 2,500.

The new northern Sephardic diaspora steadily consolidated and continued to expand. In the early seventeenth century, a stream of Jews flowed from Amsterdam to Hamburg, partly to evade restrictions in commercial traffic with Spain due to hostilities between Spain and the Netherlands; and the Hamburg community took permanent root. Even in Poland there was a Sephardic presence in the seventeenth century, with a small colony of ex-converso merchants living in the town of Zamosc. This did not, however, become a permanent outpost. Many Sephardic Jews were also active as merchants in the port city of Gdansk (Danzig).

In 1655, the well-known Amsterdam rabbi Menasseh ben Israel traveled to England in an effort to gain the right of Jewish settlement in England. (Up to this point, New Christians who had settled in London did not practice Judaism openly). Although the Whitehall Conference convened by Oliver Cromwell in December of that year produced no results, the crypto-Jews of London felt confident enough to begin organizing a community. A year later, a house was rented and adapted for use as a synagogue. Shortly thereafter, land was bought to establish a cemetery. During the Restoration, the community was granted de facto recognition, and it began to absorb a stream of new members from the Netherlands, France, and the Iberian Peninsula. As in Amsterdam, the London Jews invited rabbinic authorities from elsewhere in the Sephardic diaspora to supervise the community’s religious life. But in London, too, it was the wealthy brokers, importers, and wholesale merchants who dominated the community.