The group formed around 1970 from the socialist supporters of Juan Domingo Peron. The Montoneros hoped that Peron's would return from exile in Spain and transform Argentina into a "Socialist Fatherland". Peron's rule of Argentina from 1946-55 had been fascistic but socially progressive.
The Montoneros initiated an campaign to destabilize the pro-American regime then in power. They capped a series of assassinations with the murder of former Argentinean president Pedro Aramburu (ruled 1955-58). They financed their operations by ransoming rich businessmen or foreign executives, gaining as much as $14.2 million in a single deal in 1974 for an Exxon executive.
On March 11, 1973, Argentina held general elections for the first time in ten years. Peron loyalist Hector Campora became president, before resigning in July to allow Peron to win the new elections in October. However a feud developed between right-wing Peronistas and the leftist Montoneros. The right-wingers favoured a compromise with the conservative institution of the Church and Army rather than a socialist revolution. Right-wingers and Montoneros clashed at Peron's homecoming ceremony of June 1973, leaving 13 dead and 100 wounded. Peron supported the more conservative elements of his party.
In May 1974, the Montoneros were expelled from the Justicialist movement by Peron. However, the Montoneros waited until after the death of Peron in July 1974 to react.
The Montoneros claimed the "social revolutionary vision of authentic Peronism" and started terrorist operations against the government. In government the army quickly took power, Isabel Peron, the new Argentinean president, was essentially a figurehead. In March 1976, she was ousted and a military junta installed, led by General Jorge Rafael Videla.
In the middle of July 1974, Peronist guerrillas assassinated a former foreign minister. In September to gain money, they abducted the two member of the Bunge and Born business family. They demanded and received as ransom $60 million in cash and $1.2 million worth of food and clothing to be given to the poor.
The Montoneros and the Ejercito Revolucionario del Pueblo (ERP) went on to attack business and political figures throughout Argentina as well as raid military bases for weapons and explosives. The Montoneros killed executives from General Motors, Ford, and Chrysler. The group also sank an Argentine naval ship in 1975. On July 2, 1976 they exploded a powerful bomb in the Federal Intelligence Department of Buenos Aires, killing 18 and injuring 66 people
The Junta responded with a Dirty War to counter terrorism. Up to 30,000 people died or disappeared at the hands of regular units of the armed forces and sanctioned vigilante organizations between 1976 and 1983. The Argentine Anti-Communist Alliance (Triple A), an right-wing death squad, was one of the worst offenders. They relied on mass arrests, torture, and executions without trial, the bodies that were not helicoptered out into the Atlantic, being left on the streets as an example to the terrorists still at large. The Montoneros suffered heavy losses, out of around 7000 active supporters 1600 were killed in 1976 and the rest forced to scatter.
The Montoneros were effectively finished by 1977, although, some did fight on until 1981. Argentina remained under military rule until December 10, 1983, finally achieving some democracy following the Falklands War fiasco.