The Battle of Las Piedras was fought on May 18, 1811 as part of the Uruguayan struggle for independence. 
Background and development of events
In 1810, the May Revolution had forced the Spanish to abandon Buenos Aires, but they held on to the Banda Oriental (present-day Uruguay), and Spain moved the headquarters for the Viceroyalty of the River Plate to Montevideo. At the beginning of April 1811 the revolutionary José Artigas returned to his country with approximately 180 men provided by the Government of Buenos Aires. On April 11, he issued the Mercedes Proclamation, assuming control of the revolution.
The Governor of Montevideo and new viceroy of Río de la Plata, Francisco Javier de Elío, appointed frigate-captain José Posadas at the head of the forces loyal to Spain. Posadas installed his HQ at San Isidro Labrador de Las Piedras near Montevideo, to provoke a decisive battle against the revolutionaries.
Meanwhile, José Artigas was camped near Nuestra Señora de Guadalupe with an
army of a thousand men. The army of Posadas counted 1230 men, of which some 200 would defect to Artigas in the midst of battle.
The battle was fought on May 18 and resulted in a total victory for the revolutionaries. José Posadas capitulated. It was at this occasion that Artigas pronounced his famous sentence "Clemencia para los vencidos" (Mercy on the vanquished), referring to the Spanish wounded and prisoners. One of the casualties on the revolutionary side was Manuel Artigas, nephew of José Artigas. Both armies fought in the name of King Ferdinand VII of Spain.
Importance of the Battle
Some historians consider the victory in the Battle of Las Piedras as crucial for the survival of the revolution in Uruguay and Argentina, after the defeats of General Belgrano in Paraguay and Paraná.
After the battle, the Spanish only remained in control of Colonia del Sacramento and Montevideo, which was finally taken by Carlos María de Alvear on June 20, 1814.
The day of the battle, May 18, is now an official holiday in Uruguay.
Fuentes:
http://en.wikipedia.org/wiki/Battle_of_las_piedras