By 1180, Saladin had consolidated his power in both Egypt and Syria, but he still could not join his two realms because of the obstacle that had once protected his Egyptian realm as a buffer zone: the Crusader States. He now decided to root out the Christian principalities from the Levant, even the Byzantines, though this was not a new goal. He had begun harrying the Crusaders and pushing them back out of Egypt even before he had finished establishing his power there. However, he had also allied with them against other Muslim rivals from time to time. With his triumph over his Muslim rivals complete, he now turned on his erstwhile Christian foes. Attacks on Muslim caravans and other violations of truces by notorious Crusader, Raynald of Chatillon (c.1125-1187), beginning in 1181, gave Saladin the pretext for this change in tack.

How much of this new call to jihad in the 12th century was genuine religious fervor for Saladin and his predecessors, and how much was cynical political aggrandizement, remains subject to debate. Either way, the Crusaders had an advantage in this kind of war, despite being decentralized in secular power and relatively weak militarily compared to their Muslim neighbors. Christian religious authority was strongly centralized by the papacy in Rome and the patriarchate in Constantinople. Christian religious authority, older and better organized, also had longevity that Muslim religious authority lacked. Perhaps most importantly, the Christians weren't warring with each other, whereas the division between the two main Muslim sects, majority Sunnism and minority Shi'ism, played a huge factor in the conquest of Egypt and left the two sides downright hostile towards each other. In comparison, the division between Latin and Greek Christianity was only a century old at the time of the Third Crusade.