Costa was an outspoken critic of the regime of Brazilian president Getúlio Vargas (1930–1945) and of the Vatican's alleged relationship with fascist regimes.
He also publicly criticized the dogma of papal infallibility and Catholic doctrines on divorce and clerical celibacy.
As a result of his outspoken views, Duarte Costa resigned from his office of bishop of Botucatu in 1937 and was appointed to a titular see.

In 1940 Cardinal Sebastião da Silveira Cintra, archbishop of Rio de Janeiro, permitted Costa, as titular bishop of Maura, to co-consecrate Bishop Eliseu Maria Coroli.
Costa continued to criticize the government and the Catholic Church, advocating policies that were regarded by the authorities as Communist.
In 1944 the Brazilian government imprisoned him, but later freed him under political pressure from the United States and Great Britain.

In May 1945 Costa gave newspaper interviews accusing Brazil's Papal nuncio of Nazi-Fascist spying, and accused the Vatican of having aided and abetted Hitler.
In addition, he announced plans to set up his own Brazilian Catholic Apostolic Church, in which priests would be permitted to marry (and hold regular jobs in the lay world), and bishops would be elected by popular vote.

On June 1945, Costa established the Brazilian Catholic Apostolic Church (ICAB).
Costa's act of schism resulted in his automatic excommunication from the Catholic Church.
Later Costa was declared a vitandus – a person to be avoided by Catholics – and those Catholics who became adherents of ICAB were excommunicated also.
According to Peter Anson, Costa was excommunicated "for attacks against the papacy,"
In 1949, the Brazilian government temporarily suppressed all public worship by ICAB, because its liturgy and its clerical attire would result in confusion by being indistinguishable from those of the Catholic Church and were tantamount to deception of the public.
However, a few months later ICAB churches were permitted to reopen, provided that their liturgy would not duplicate the Catholic liturgy, and their clergy would wear gray clerical attire in contrast to the black attire worn by Catholic clergy.

Costa implemented reforms in ICAB of what he saw as problems in the Catholic Church.
Clerical celibacy was abolished, though he himself never married and remained celibate.
Rules for the reconciliation of divorced and remarried persons were implemented.
The liturgy was translated into the vernacular, clergy were expected to live and work among the people and support themselves and their ministries by holding secular employment.

Shortly after founding ICAB Costa consecrated four bishops, Salomão Barbosa Ferraz in 1945, Antidio Jose Vargas and Jorge Alves de Souza in 1946, and Luis Fernando Castillo Mendez in 1948.
Costa, Ferraz, and Mendez attempted to establish similar autonomous National Catholic Apostolic Churches in several other Latin American countries.
Costa was consecrator or co-consecrator of 11 additional bishops, each of whom took a leadership role in either ICAB or one of the other National Churches.

Ferraz left ICAB in 1958.
Ferraz reconciled with the Catholic Church in 1959 and his episcopal consecration was recognized as valid.
However, Ferraz was excluded from church affairs such as the Roman Synod of 1960, even though he was present in Rome at the time, while the Vatican belatedly questioned the legitimacy of having recognized his status.
Shortly thereafter, in 1961, Costa died and ICAB underwent several years of tumult as dissensions, schisms, and multiple claimants to the patriarchal throne threw the church into disarray.
After this period, the church found stability and growth under Mendez, Costa's successor.

Some sources seem to indicate that Mendez assumed leadership of ICAB upon Costa's death in 1961.
Bishop Antidio Jose Vargas initially stepped in as General Supervisor, followed by Pedro dos Santos Silva as first president of the Episcopal Council, followed by the Italian-born Luigi Mascolo during the 1970's.
By 1982 Castillo Mendez was elected president of the Episcopal Council, and was
Costa was an outspoken critic of the regime of Brazilian president Getúlio Vargas (1930–1945) and of the Vatican's alleged relationship with fascist regimes. He also publicly criticized the dogma of papal infallibility and Catholic doctrines on divorce and clerical celibacy. As a result of his outspoken views, Duarte Costa resigned from his office of bishop of Botucatu in 1937 and was appointed to a titular see.
In 1940 Cardinal Sebastião da Silveira Cintra, archbishop of Rio de Janeiro, permitted Costa, as titular bishop of Maura, to co-consecrate Bishop Eliseu Maria Coroli. Costa continued to criticize the government and the Catholic Church, advocating policies that were regarded by the authorities as Communist. In 1944 the Brazilian government imprisoned him, but later freed him under political pressure from the United States and Great Britain.
In May 1945 Costa gave newspaper interviews accusing Brazil's Papal nuncio of Nazi-Fascist spying, and accused the Vatican of having aided and abetted Hitler. In addition, he announced plans to set up his own Brazilian Catholic Apostolic Church, in which priests would be permitted to marry (and hold regular jobs in the lay world), and bishops would be elected by popular vote.
On June 1945, Costa established the Brazilian Catholic Apostolic Church (ICAB). Costa's act of schism resulted in his automatic excommunication from the Catholic Church. Later Costa was declared a vitandus – a person to be avoided by Catholics – and those Catholics who became adherents of ICAB were excommunicated also. According to Peter Anson, Costa was excommunicated "for attacks against the papacy,"
In 1949, the Brazilian government temporarily suppressed all public worship by ICAB, because its liturgy and its clerical attire would result in confusion by being indistinguishable from those of the Catholic Church and were tantamount to deception of the public. However, a few months later ICAB churches were permitted to reopen, provided that their liturgy would not duplicate the Catholic liturgy, and their clergy would wear gray clerical attire in contrast to the black attire worn by Catholic clergy.
Costa implemented reforms in ICAB of what he saw as problems in the Catholic Church. Clerical celibacy was abolished, though he himself never married and remained celibate. Rules for the reconciliation of divorced and remarried persons were implemented. The liturgy was translated into the vernacular, clergy were expected to live and work among the people and support themselves and their ministries by holding secular employment.
Shortly after founding ICAB Costa consecrated four bishops, Salomão Barbosa Ferraz in 1945, Antidio Jose Vargas and Jorge Alves de Souza in 1946, and Luis Fernando Castillo Mendez in 1948. Costa, Ferraz, and Mendez attempted to establish similar autonomous National Catholic Apostolic Churches in several other Latin American countries. Costa was consecrator or co-consecrator of 11 additional bishops, each of whom took a leadership role in either ICAB or one of the other National Churches.
Ferraz left ICAB in 1958. Ferraz reconciled with the Catholic Church in 1959 and his episcopal consecration was recognized as valid. However, Ferraz was excluded from church affairs such as the Roman Synod of 1960, even though he was present in Rome at the time, while the Vatican belatedly questioned the legitimacy of having recognized his status. Shortly thereafter, in 1961, Costa died and ICAB underwent several years of tumult as dissensions, schisms, and multiple claimants to the patriarchal throne threw the church into disarray. After this period, the church found stability and growth under Mendez, Costa's successor.
Some sources seem to indicate that Mendez assumed leadership of ICAB upon Costa's death in 1961. Bishop Antidio Jose Vargas initially stepped in as General Supervisor, followed by Pedro dos Santos Silva as first president of the Episcopal Council, followed by the Italian-born Luigi Mascolo during the 1970's. By 1982 Castillo Mendez was elected president of the Episcopal Council, and was
Brazilian Catholic Apostolic Church