Oh, this is a really good question largely because there's a lot of debate over what 'started' the slide for the Ottoman Empire, so please forgive me if this one is going to be a little long-winded.
A little background in necessary; Mehmet II, also known as Mehmet the Conqueror, had captured Constantinople in 1453, ending the sickly Medieval Roman (Byzantine) Empire's run. in 1459, Pope Pious II declared a Crusade against the Ottoman Turks, but it was largely up to the Eastern European states like Modavia, Hungary and Wallachia to resist Ottoman encroachment. Arguably, the apex of Ottoman reach into Europe culminated in the Siege of Vienna in 1529. It is in this context that the speculation amongst historians begins to swirl about the 'decline' of Ottoman power.
There are some who argue that the 1571 Battle of Lepanto - a naval battle between Catholic Europeans and Ottoman Turks - was the first indicator of the 'decline' of Ottoman power. Int he battle, the smaller but slightly more technically-advanced "Holy League" defeated the numerically-superior but overconfident Ottoman navy. The defeat was seen in Ottoman circles of the result of God's will - ironically, the same position was taken by the Holy League - as the rout was truly devastating; around 30 Ottoman ships made it home out of a whopping 250-ish. Some historians (in my opinion, wrongfully) argue that this signaled the rise of Europe as a technologically, and politically advanced region which would be able to credibly challenge the Ottomans on their own turf (in this case, the Ionian sea). But I disagree; the Ottomans learned from the loss and updated their ships and, within a year, were back and bigger than ever. in 1573, they wrested Cyprus from Venetian control and mocked Venetian "power" saying that in wresting Cyprus from them, they had deprived Venice of an arm, while the defeat at Lepanto was merely a "shaved beard."
The second point where historians argue that the Ottoman Empire was losing its grip was the Battle of Vienna. Though Ottomans had not taken Vienna in 1529, they at least were able to force Europeans to recognize their superiority and exact tribute. The disastrous Battle of Vienna in 1683; the impressively large Ottoman force besieged Vienna for nearly two months, but was turned away by a combined Polish, Austrian, and Holy Roman Empire coalition. This time, the Europeans were much more organized, much more technologically-advanced, and much richer (thus able to wage these wars). After the battle, the Ottomans began losing territory in Hungary, Transylvania and other European countries over the next two decades. So what had change int he last few years? Well, part of it was a recognition of the threat that the ottomans posed against the Europeans, thus necssitating a coalition of the big players of the day. Also, there is the matter that Western Europeans had established profitable colonies on the Western Hemisphere, leading to a general increase in wealth for most of Europe, which allowed them to prosecute such a huge war. And finally, the Ottomans had some internal problems of their own (such as an increasingly petulant Janissary corp). This loss led to more losses and culminated in the humiliating Treaty of Karlowitz in 1699. Even though the Hapsburgs had become a central/eastern European power through this treaty, I'd say that the Ottomans were at best 'stagnating' and not necessarilly declining at this point; they were still a regional power int he Mediterranean and the Middle East.
A real blow came, however, when Egypt rebelled against Ottoman rule. In the late 18th century, a group of so-called "Mamluk" (meaning slave) military leaders declared their independence from the Ottomans and the Ottomans were relatively helpless to stop them, partly because the Mamluks paid lip service to being part of the Ottoman Empire and the Sultan was willing to play along with the fiction.
What the Sultan could not play along with, however, was France's invasion of Egypt in 1798. Napoleon probably invaded in order to threaten English ties to India, though he allegedly argued he was doing it for the benefit of the Ottoman Empire, promising to rule it in the Sultan's name. The Ottomans reached out to the English and sent their best general, Muhammad Ali, to free Egypt and return it to Ottoman control. At this point, we can see that the Ottomans have lost control over their internal affairs and were lagging far enough behind that they had to rely upon other outsiders to defend their borders; a sure sign of decline. It didn't help matters that Muhammad Ali essentially crowned himself king of Egypt and began an ambitious - and largely successful - modernization project in Egypt which had been tried (and failed) in the Ottoman Empire. His reforms made Egypt a regional power and strong enough militarily to challenge the Ottomans credibly. His conquest of Syria and attempt to march on Constantinople was only stopped because the Sultan was able to call upon the English for help.
Reforms in the Ottoman Empire - modernization, mechanization, industrialization, etc. - were often opposed by the ulemma or 'educated' religious leaders of the Muslim community as Western poison which would further corrupt the Ottoman Empire. Critics of these ulemma derisively called them juhala meaning 'ignorant' or 'stupid' to denote the unreasonable resistance to modernity.
To make matters worse, the Ottoman Empire - for various reasons including the invasions noted above - began to sign increasingly lop-sided agreements with England, France, and (to a lesser degree) Russia. These so-called "Capitulations" granted immunity to prosecution, taxes, and inspection by the Ottomans of the respective subjects, at least at first. These 'protections' were later expanded to include favored ethnic or confessional groups within the Empire, thus weakening even further the Ottoman control of internal policy and law enforcement. Over the course of the 19th century, Ottoman government and leaders essentially relied more and more on foreign aid and investment to keep their empire limping along. Partly because of these unequal treaties, partly because of the reticence of the rabble-rousing ulemma and Janissaries, and partly because of the economic inability to do otherwise.
This cycle of dependency was a hallmark of the 19th century as foreign powers treated the Ottomans like a combination of an over-ripe melon ready to be carved up and a sickly old man, unable to defend himself. A really good example, is the Crimean War (noted below); Russian troops sought to eject Ottoman control from the Black Sea, particularly Crimea, and looked to be on the verge of doing so when the English and, to a lesser degree, the French intervened on the Ottoman behalf. Now any illusion that the Ottomans had that they could defend themselves were gone.
There were late-19th century attempts at reform and revolution, most notably the Young Turk (also called the Committee of Union and Progress, or CUP) movement. But, one could argue, it was too little too late. By the beginning of the 20th century, even though the Ottomans were beginning to pull themselves out of a political and economic nose-dive, they had such an uphill battle, that it is doubtful they could have accomplished it.
The final straw was, of course, World War One. Though the Ottomans aquitted themselves fairly well at battles such as Gallipoli - mostly due to the incompetence of Britain's command staff and geography - the rest of the war did not go well for the Ottomans. Though the Russians were poorly armed poorly trained, and relatively poorly led, the Ottomans were worse, losing battle after battle. At the same time, England was riling up the Arabs against the Ottomans and had taken full control of Egypt. Territorially, the Ottomans were in bad shape as well; they were a mere sliver of who they once were and, in the end, I don't think anyone was surprised when a new state emerged from the Ottomans' ashes.
TL;DR - NO! go back and read it, this is Ask Historians, not ask Reddit ;)
Weak leadership and a falling behind in technological advances combined with increased religious conservatism during the mid 16th and into 17th century led to a downturn in Ottoman military and economic strength.
Defeat at Lepanto and Malta in the latter half of the 16th century dispelled the seemingly invincible nature of the Empire.
Civil uprisings due to oppressed peasantry and a corrupt bureaucracy spread across the empire around the turn of the century caused increasing internal instability.
A brief revival under effective leadership during the early to mid 17th century saw some stabilisation but little expansion and ended with defeats in the Great Turkish War of of 1683 - 87 and the Austro-Turkish War of 1716 - 18. These defeats left no doubt that the Empire was pretty weak in comparison to the European nations. It never recovered it's former status after that.
EDIT: Centuries can be confusing....
Source: Stanford J. History of the Ottoman Empire and Modern Turkey. Goodwin J. Lords of the Horizons: A History of The Ottoman Empire.
Wow, this is SUCH a big question. I actually just finished a seminar that was very very heavily focused on the Ottoman Empire up until the Young Ottomans Revolution.
One of the biggest things that I learned from the course was that decline may not be the way to describe what happened to the Ottoman Empire. Rather than viewing the Ottomans as declining, recent scholars have argued that the empire was merely going through a period of great change and adaptation. The Sultanate had generally become weaker, and it seems as though the empire was in decline due to the great amount of decentralization. In reality, the decentralization was a way for the empire to adapt to a changing time that made it harder for the Porte to effectively control from the center. The decentralization of power to local notables, called ayans, actually helped to bring the provinces closer to the center, as the ayans relied on the political center at Istanbul to hold onto their positions of power in the provinces.
The beginning of the end of the Ottoman Empire, I believe, can be seen during the 19th century, where the rise of bureaucracy of the Sublime Porte began to conflict with the rising power of the sultanate, especially during the reign of Abdulhamid II. During his reign, he attempted to swing back the power from the Sublime Porte, which had become a large bureaucracy, towards the Sultanate and the belief that loyalty should be towards the Sultan. From this conflict, we can see the rise of power of revolutionary groups such as the Young Ottomans, which would eventually lead to the disintegration of the Empire.
I'm fascinated by this. Can anyone recommend good books on the subject?
As an economist, instead of weak leadership and a falling behind in technological advances and all the usual historical information.
Before the new world most of the trade the ottomans and Europeans did was around the Mediterranean, and the silk road. By the 17th century the transatlantic trade was enough to give the Europeans a significant edge. Also the Ottoman empire was a significant portion of the silk road and explorers/traders had gotten around Africa and essentially skipped the ottoman empire.
Before this the ottomans were a midway point for the Europeans and India/China. Less trade they become less important, less rich, less exchange of culture and technology.
TL;DR the ottomans became cut out of the equation.
This is a question that would take an entire college class to answer, and indeed is one that the majority of a class I'm taking on Ottoman History right now has spent answering. I will try to summarize, but be aware that this is a summary, this is not a simple subject, and above all it is very, very incorrect to posit that the Ottoman Empire was ever in a state of continual decline, and instead its loss in power should be seen in relevance to other countries' (Britain, France, and Russia mostly) constant pursuing of Ottoman lands and territories over pretty much a century.
The start is 1838. The preceding years saw Muhammad Ali and his armies march across Ottoman territories, shrugging off Ottoman attempts to drive them back. Muhammad, it should be noted, was not directly disloyal to the Sultan, and was actually doing quite a job of making the lands he conquered far more efficient. This is why he won battle after battle, he managed to fully tap into the resources at the Ottoman's disposal, something that you see the Ottoman Empire immediately trying to emulate as soon as he is no longer a threat. That is beside the point though. The Sultan, desperate and worried about becoming a puppet-Sultan under Muhammad's rule, signs a treaty with the British and the French to work with them to end Muhammad's march across Anatolia. Included in these treaties was a capitulation: British import taxes are removed, completely.
You can imagine the kind of havoc this wreaks on the Ottoman economy. The British, and the French soon after in 1839, fully exploited this advantage in order to basically Walmart local economies, driving prices down so low that local vendors had no chance to compete and were forced out of business. This happens mainly in the most productive Ottoman sectors, the ports where the British have easy access to goods and trade.
Also beginning in this time to set a trend that will be very important later is the Tanzimat era, where the Ottoman government essentially tried to emulate the reforms done by Muhammad to gain power, and to try and counteract the British and the French's influence on their economy. The Tanzimat, to simplify, can be thought of as a process of state centralization and liberal reforms. The government wanted greater control over its outlying areas in order to access the resources there. At first this was mainly material and agricultural goods, but after the 1850's with the Crimean war this increasingly became about accessing the manpower of these areas to turn them into a fighting force, to shore up the Ottoman borders.
The Crimean war also has the effect of putting the Ottoman Empire into a position where it has to take out its first international loan in order to continue their reforms, pay for the army, build new hospitals and schools etc... Again, at this time the Ottoman empire is by no means losing out on pace with Europe in terms of material wealth or technological prowess, interestingly enough they were very aware that this is what the European's thought of them though. Read Ussama Makdisi's Ottoman Orientalism if you have access to JSTOR. It has some problems with anachronisms, but it gives a great overview of the Ottoman mindset. The government was very, very aware of the weaknesses it did have, and worked to fix those issues before the next big war with Russia that it was always predicting.
Back to those loans, these come back to hurt the Ottomans big time in 1875, where the (essentially) bureaucracy that had been enacting the reforms default on the loans, and proclaim that they are not going to pay them back. 1876 follows, there is several coups and a new Sultan, AbdulHamid II, arises and is more than willing to work with foreign powers to pay back the debt. There is also a new constitution with him, but its discontinued in 1878 and I do not know of those two years importance in Ottoman history. However, with its discontinuation, the bureaucracy of old is exiled, murdered, or assimilated into the new regime. The ones that are exiled go on to form the Committee of Union and Progress, and they will be the ones to enact the coup in 1908 to re-institute the constitution.
In the meantime, the Ottoman government is granting more and more capitulations to foreign powers to pay back its ever growing debt. The Ottoman Imperial Bank was essentially created to transfer to a money society to pay back debts, and was run at its highest levels by the French and the British. The Public Debt Administration created in 1881 gave large chunks of Ottoman lands ripe with resources to foreign powers to pay back these debts as well. 25% of Ottoman expenses went to these loans, and the French and British had certain monopolies, like on beer and Tobacco. Again, the Ottoman Empire seems like it's in its death throes, but the evidence supports that the French and British could not have militarily taken the Empire. That seems to be less because of their weakness or Ottoman strength, and more because these powers simply did not have the manpower to take and hold a territory as vast as Ottoman holdings, only areas like Egypt, which had been an mostly autonomous state since the 1860's, and Libya, which was far removed from Ottoman core-lands anyways.
So, that is happening when 1908 rolls around, the C.U.P. enacts a successful coup that essentially makes the Sultan a puppet Sultan, with the parliament being the real power in Ottoman society. The parliament, ironically enough, has to some degree an amount to do with the rise of sectarian differences in the late Ottoman empire, as its representatives were based on the millet system, semi-autonomous religious groups, and the competition between these millets in parliament, though based on food or resources or budget, became somewhat based on these religious differences.
So, the CUP, the same people from thirty years ago essentially, are back in power, and continue to enact the reforms they were doing so beforehand, except now they have an urgency about them. These people felt a very real fear now that the Ottoman Empire could die, and their attempts to reign in outlying provinces was a reaction to foreign powers attempting to infringe on Ottoman sovereignty, literally handing these peoples guns and encouraging them to rise up against the Ottoman Empire. Around this time is when you begin to see the rise of the view of the Ottoman Empire as despots ruling over independent peoples. The Albanian uprisings and the Arab revolts are partially consequences of these foreign influences, as was the Armenian uprisings a decade later.
So, World War I rolls around, for the Ottoman Empire it really begins in 1911-1912, with the Balkan wars that sees them lose most of the rest of their Balkan territory. One of the more important effects of this is scaring the Ottoman's shitless, because they see the treatment of Muslims in these lands, they witness and hear about the mass executions and deportations - these people end up in Anatolia, where everyone sees what has happened. This convinces the government that no matter what the Empire must be protected, they feel that without the Empire there will be no safe place left for Muslims in the world. Indeed in 1917 when the Russians reveal to the world the Sykes-Picot agreements, secret negotiations between the British and the French to carve up the Ottoman Empire into various spheres of influence, they see that there is no Muslim homeland, there would not be a national state left for Islamic peoples. This, actually doesn't have much to do with the decline of the Ottoman Empire, but rather the rise of Turkey as a nation-state, but, I am rambling.
As a final point, after 1917 when Russia withdrew its forced from Ottoman territories, the Ottoman Empire managed a very successful campaign in Central Asia, managing to take the caucus, pretty much, against the interference of the British and the French. They would have kept the Caucus to, if not for the ultimate ending of World War I with Germany's defeat, whom they were allied with and semi-dependent on. The point of this last paragraph is the the Ottoman Empire was not dead, even at the ending days of World War I. They were very much alive and, as one can see with the rise of Turkey, had a fighting force that was more than able to force foreign powers out of Anatolia and establish for themselves a country, in no small part because they were aware that without this country Islam was in great danger as a religion.
So uh, yeah. The point of this entire thing is that there is no real Ottoman Decline. The Ottoman Empire gets weaker, kind of, but there isn't really an event that one can point to and say is the beginning of the end of the empire, 1838 being the best one, but even then you can clearly see the State strengthening itself and continuing to keep pace with European powers. Istanbul had one of the first subway systems in the world, for reference. Over a few hundred years of history it is ludicrous to claim that any one event did an empire in. So, what killed the Ottomans? World War I. Why did they lose it? Very long, complicated answer.
This is summarizing the better majority of an 18 week class on the subject. I'm pretty much melting down 40 or 50 research papers and book chapters on Ottoman history to write this, avoiding direct citations because without reading the papers you wouldn't really get this anyways. Even reading the papers you would probably come up with a different conclusion! I encourage you to go out and research this on your own, and if you can find a class on it to take. It is interesting stuff.
There is already a great top comment, but I wrote an essay on the subject, so I figured I would interject a few things that VetMichael left out. The first and foremost thing that made the Ottoman empire start to decline was the failure of the Siege of Vienna in 1529. The Ottoman empire had been constantly expanding rapidly since it's founding, and after this failure it marked the end of any real significant expansion. Because everyone was used to this expansion, the entire structure of the country was based around it. The lower classes could strap on some arms and armor and get some loot to bring home, and help to bring themselves out of poverty because of the frequency of military campaigns, so when the expansion stopped, discontent spread through the empire. In addition to this, large amounts of their military were based off of conscripts and POWs from newly conquered lands. Because of this declining military, the Ottomans were forced to turn their elite fighting force, the Janissaries who were trained from birth and forbidden to have families, into a more aristocratic structure which condoned baby-making to increase numbers, it brought down the effectiveness of this important military class. Stopping expansion crippled them, but the biggest problem was economy, not military or a few angry peasants.
The Ottomans had a system of guild monopolies. There was a giant guild making all of the soap, and another for the shoes. They couldn't abuse their monopoly because the government regulated prices. This was puppies and sunshine until the westerners showed up with spoils of American conquest in their pockets. The westerners weren't trading in the Ottoman Empire to compete for soap and shoes, they couldn't. However what they did compete for was raw materials. It seemed good because it was trade, and it pumped gold into the empire, especially since Europeans had control of new sea routes to the eastern part of the world, however trade in the Empire suffered greatly because of it. But the raw materials going to Europe were the same needed in the empire for the guilds to produce their products. The government put a law against it, but then a black market popped up. So then there was a lot of people who had illegal money, and no increase productivity in the state. This caused massive inflation. Inflation hurts people on fixed income the most, and the people on fixed income were the bureaucrats and people of the court. These people now have their buying power reduced and the government can't afford to pay them more. In 1929 when the stock market crashed, many of those people who committed suicide were still worth a million dollars. It's not how much you lose, but how much less proportionally you have. All of these people in the court had the power to deny people to administration and legal workings. Bribery and corruption skyrocketed, as did inefficiency and decentralization.
Lets fast forward to early-mid 1800s. The industrial revolution is spreading like wildfire throughout all of the western countries. Goods are being mass produced, countries can have high standards of living, larger armies than ever before can be equipped for war. However there is a problem. The Ottoman Empire cannot industrialize. This means that they cannot do things like build railroads, guns, or any goods in general on their own. They needed to buy from Europe, this drove the Ottomans deep into debt, and they kept being abused by the Europeans who demanded more and more economic rights through "Capitulations". You might say why not just industrialize? There were some large factors on why this couldn't happen. One was the large amount of nationalist revolutions happening in places like the Balkans and all across the empire that would worsen in the event of an industrial revolution. However the biggest problem was religion. While there was a reformation with Christianity in Europe there was never one with Islam. Islam held huge amounts of power and over the past few hundred years things such as being intellectual using logic and reason have been essentially thrown out of the window. Itijihad, free, creative thinking based on reason was no longer allowed. It had been to fill out any missing holes left by Islamic texts, however by this time, it was thought to no longer be needed, all people had to do was follow the rules.
An economy and society based on a constantly expanding Autarky crashed and failed after it stopped expanding. It caused inflation which led to corruption, and then caused everyone to freak out and go fundamental, eliminating the chance for any kind of scientific or industrial revolution.
In case you are curious, my biggest source is a book called destiny disrupted.
Follow up question on something I never really understood: How exactly did the Ottoman Empire end?