This article is dedicated to the initial period of the history of Armenian Protestantism in the Russian Empire. It characterizes the basic principles of Russian confessional policy concerning Armenians, such as the state’s support of the Armenian Apostolic Church and its opposition to Catholic and Protestant propaganda among Armenians. This article discusses the background of the Armenian Protestant movement and reveals that it was due to the activity of American missionaries in the Ottoman Empire and of the Basel Missionary Society in Russian Transcaucasia. Further, it describes the history of the formation of the Protestant community in the city of Shamakhi in Baku Governorate and the circumstances of its legalization as a parish of the Evangelical Lutheran Church. It also considers the reasons for the conversion of part of the Shamakhi Armenians to Protestantism and the possible contacts of the Protestants of Shamakhi with foreign religious organizations. The author analyzes the reasons and approaches that guided the officials of the MVD (Ministry of Internal Affairs) and the Caucasus Viceroyalty in the settlement of the conflict between the Armenian Protestants and the religious authorities of the Armenian Apostolic Church. He comes to the conclusion that the religious crisis in Shamakhi was resolved by the Russian powers in compliance with the principles of imperial bureaucratic confessionalism and limited religious tolerance that existed in Russia before 1905.