On October 5, 1143, Alfonso VII of Leon and Castile met his cousin Afonso Henriques at Zamora and signed a treaty recognising him as king of Portugal. The county of Portugal had been given to Afonso's father, Henry of Burgundy, in 1096 as a dowry with Teresa of Leon, and Afonso had been ruling it since 1128, when he defeated his mother's forces at Sao Mamede. He called himself king already.
The title was the question. In the twelfth century the Iberian kings were fighting the Almoravids and then the Almohads, and they were also fighting each other, and the difference between a count and a king was the difference between a vassal who could be summoned and a ruler who could not. Alfonso VII called himself emperor of all Spain, which meant he could not concede the point in principle, and the treaty is usually read as a settlement he needed rather than one he wanted.
What forced it was the south. The Reconquista was moving, and the Christian rulers were competing for the cities as well as fighting the Muslims. Afonso took Santarem and Lisbon in 1147, helped by a fleet of crusaders on their way to the Second Crusade, and the Tagus line gave Portugal roughly the shape it has kept. The treaty of Zamora fixed the northern border against the neighbour who actually threatened it.
Recognition took 36 years. Alexander III issued the bull Manifestis Probatum in 1179, accepting Afonso's homage and taking Portugal under papal protection, and that is the document usually cited as the moment the kingdom existed in law. The boundary with Leon and Castile was finally settled by the Treaty of Alcanizes in 1297, and it is close to the modern one.
The southern expansion ended in 1249 with the taking of Faro and the Algarve, which left Portugal with borders that have changed less than almost any other in Europe since the thirteenth century. The 1143 date is the one Portuguese histories use for the founding of the state. Afonso took Lisbon in 1147. Afonso Henriques, Afonso I, is the first king in the line that ran until 1910.