The agreement allocated to Britain control of areas roughly comprising the coastal strip between the Mediterranean Sea and the River Jordan, Jordan, southern Iraq, and an additional small area that included the ports of Haifa and Acre, to allow access to the Mediterranean. France got control of southeastern Turkey, northern Iraq, Syria and Lebanon. Russia was to get Istanbul, the Turkish Straits and Armenia. The controlling powers were left free to determine state boundaries within their areas. Further negotiation was expected to determine international administration in the "brown area" (an area including Jerusalem, similar to and smaller than Mandate Palestine), the form of which was to be decided upon after consultation with Russia, and subsequently in consultation with the other Allies, and the representatives of Hussein bin Ali, Sharif of Mecca.
The agreement effectively divided the Ottoman Arab provinces outside the Arabian peninsula into areas of British and French control and influence. In the Levant, it was initially used directly as the basis for the 1918 Anglo–French Modus Vivendi which agreed a framework for the Occupied Enemy Territory Administration. More broadly it was to lead, indirectly, to the subsequent partitioning of the Ottoman Empire following Ottoman defeat in 1918.
The Acre-Haifa zone was intended to be a British enclave in the North to enable access to the Mediterranean. The British later gained control of the brown zone and other territory in 1920 and ruled it as Mandatory Palestine from 1923 until 1948. They also ruled Mandatory Iraq from 1920 until 1932, while the French Mandate for Syria and the Lebanon lasted from 1923 to 1946. The terms were negotiated by British diplomat Mark Sykes and a French counterpart, François Georges-Picot. The Tsarist government was a minor party to the Sykes–Picot agreement, and when, following the Russian Revolution, the Bolsheviks published the agreement on 23 November 1917, "the British were embarrassed, the Arabs dismayed and the Turks delighted".
The agreement is seen by many as a turning point in Western and Arab relations. It negated the UK's promises to Arabs made for a national Arab homeland in the area of Greater Syria, in exchange for supporting the British against the Ottoman Empire.
In the Constantinople Agreement earlier in 1915, following the start of naval operations in the run up to the Gallipoli Campaign the Russian Foreign Minister, Sergey Sazonov, wrote to the French and UK ambassadors and staked a claim to Constantinople and the Straits of Dardanelles. In a series of diplomatic exchanges over five weeks, the UK and France both agreed, while putting forward their own claims, to an increased sphere of influence in Iran in the case of the UK and to an annex of Syria (including Palestine) and Cilicia for France. The UK and French claims were both agreed, all sides also agreeing that the exact governance of the Holy Places was to be left for later settlement. Although this agreement was ultimately never implemented because of the Russian revolution, it was in force as well as a direct motivation for it at the time the Sykes–Picot Agreement was being negotiated.
The report of the De Bunsen Committee, prepared to determine British wartime policy toward the Ottoman Empire, and submitted in June 1915, concluded that, in case of the partition or zones of influence options, there should be a British sphere of influence that included Palestine while accepting that there were relevant French and Russian as well as Islamic interests in Jerusalem and the Holy Places.
On 21 October 1915, Grey met Cambon and suggested France appoint a representative to discuss the future borders of Syria as Britain wished to back the creation of an independent Arab state. At this point Grey was faced with competing claims from the French and from Hussein and the day before had sent a telegram to Cairo telling the High Commissioner to be as vague as possible in his next letter to the Sharif when discussing the northwestern, Syrian, corner of the territory Husein claimed and left McMahon with "discretion in the matter as it is urgent and there is not time to discuss an exact formula", adding, "If something more precise than this is required you can give it."