The affair began when French intelligence officers intercepted an unsigned letter to a German military attaché giving away military secrets. Based on unfounded suspicions, his Jewish ancestry, and a ludicrously lax handwriting comparison, Dreyfus was court-martialed for treason. The court-martial was closed to the public and the evidence used against Dreyfus was classified. To firm up the weak case against Dreyfus, the judges were presented with a secret document the existence of which was not even revealed to Dreyfus's defense counsel. On the basis of the secret evidence, Dreyfus was convicted and sentenced to life imprisonment at the penal colony at Devil's Island in French Guiana. He was first forced to undergo public humiliation in the courtyard of the Ecole Militaire by having his insignia stripped from his uniform in a "degradation" ceremony. An antisemitic crowd of around 20,000, whose antagonism had been whipped up by the press, was there to jeer at him.

Dreyfus's family urged his innocence at every opportunity, but they were stymied. In 1896, a second letter was intercepted, this one specifically naming Infantry Major Ferdinand Walsin-Esterhazy as the spy. The new chief intelligence officer, Lt. Col. Georges Picquart, immediately re-examined the Dreyfus file and became convinced Dreyfus was wrongly convicted and that Esterhazy was guilty. His attempts to get the General Staff to reopen the case, however, were met with resistance. Instead, the existence of the secret file against Dreyfus was leaked to the press in an effort to cinch Dreyfus's guilt, and a newly forged document specifically naming Dreyfus as the guilty party was also leaked. Picquart was soon transferred to Tunisia, but while on leave engaged in leaks of his own: he confided the information about Esterhazy to a civilian friend, who in turn provided it in confidence to Vice-President of the Senate Auguste Scheurer-Kestner. But Scheurer-Kestner was unable to make any headway in uncovering further evidence.

It's about here that the story turns from injustice to farce.

At a meeting, General Billot, the Minister of War, General Gonse, the Deputy Chief of the General Staff, Major Joseph-Hubert Henry, the forger of the new evidence against Dreyfus, and Dreyfus's biased prosecutor, Commandant Armand du Paty de Clam, decided to warn Esterhazy, the spy, of the suspicions against him so that he could act more discreetly in the future. Indeed, after Esterhazy met with his German handler one more time, he met with du Paty de Clam, who promised him protection. Not long after, however, Esterhazy's banker recognized his handwriting on a copy of the original 1894 letter to the German attaché, which Dreyfus's family had circulated. Scheurer-Kestner publicly declared Dreyfus innocent, and Dreyfus's brother filed suit against Esterhazy. Responding to the charge, the military conducted a hasty court-martial against Esterhazy, again in closed session, and he was promptly acquitted. Instead, Lt. Col. Picquart was arrested and jailed for passing secret military information to civilians.

At that point various French intellectuals began to rally to Dreyfus's cause, including Émile Zola, who published his famous letter, titled "J'Accuse!", in a French newspaper in January 1898. Zola accused various members of the French military of having railroaded Dreyfus and covered it up:

I accuse Lt. Col. du Paty de Clam of being the diabolical creator of this miscarriage of justice-- unknowingly, I am willing to believe-- and of defending this sorry deed, over the last three years, by all manner of bizarre and evil machinations....

I accuse General Billot of having held in his hands absolute proof of Dreyfus’s innocence and concealing it, thereby making himself guilty of crimes against mankind and justice, as a political expedient and a way for the compromised General Staff to save face.

I accuse General de Boisdeffre and General Gonse of complicity in the same crime, the former, no doubt, out of religious prejudice, the latter perhaps out of that esprit de corps that has transformed the War Office into an unassailable holy ark....

I accuse the offices of the War Office of having used the press, particularly L’Eclair and L’Echo de Paris, to conduct an abominable campaign to mislead public opinion and cover up their own wrongdoing.

Finally, I accuse the first court martial of violating the law by convicting the accused on the basis of evidence that was kept secret, and I accuse the second court martial of covering up this illegality, on orders, by committing the judicial crime of acquitting a guilty man with full knowledge of his guilt.

An English translation is here; the original French can be found here.

The Zola letter marked a dramatic turning point, where public pressure began building on the French government to conduct a proper investigation into the affair. French society split between "Dreyfusards" and Dreyfus's mostly antisemitic opponents, such as the Ligue Antisémitique Française. A Dreyfusard became President and there was an anti-Dreyfusard coup attempt. Zola was criminally charged with libel against the various parties he accused, and his subsequent trial was a sham. He was convicted, and fled to London.

Later that year, however, the 1896 Henry forgery was finally revealed; Henry confessed and committed suicide, and the new Minister of War resigned along with two members of the General Staff. In 1899, the Supreme Court of Appeals finally heard Dreyfus's appeal and overturned his treason conviction, granting him a new trial. He was brought back to France, re-tried before a court-martial, and convicted again. Due to "extenuating circumstances," i.e., the fact that someone else had been proven to be the guilty party, the military court lessened Dreyfus's sentence to ten years' detention, five of which he had already served.

Ten days later, amid an international uproar over the verdict, French President Émile Loubet pardoned Dreyfus, and the Minister of War pronounced the matter closed. Picquart was released from prison, and the Chamber of Deputies passed a general amnesty law that applied to all parties involved in the affair, including Zola. Zola, however, died under mysterious circumstances of carbon monoxide poisoning in 1902. Dreyfus, meanwhile, was allowed to pursue an appeal of his second conviction, which finally led to the Supreme Court of Appeal reversal in 1906.

Online references:

Dr. Jean-Max Guieu, Timeline of the Dreyfus Affair

BBC News, The Dreyfus Affair: 100 Years On, July 11, 2006.

Wikipedia, Dreyfus Affair pages

Israel Department for Jewish Zionist Education, "Dreyfusgate"

Donald E. Wilkes, Jr., "J'Accuse...!" Emile Zola, Alfred Dreyfus, and the Greatest Newspaper Article in History.

[Update: Typos corrected.]