During the last two decades of the 19th century, manufacturing, banking, and transportation expanded, but agriculture remained depressed. The early years of the 20th century marked the beginning of a progressive era for North Carolina. Under Governor Charles B. Aycock (1901–05), public education was improved. Regulation of industry was begun. Various economic development projects were started.

After World War I, industrialization and urbanization proceeded rapidly under business-oriented governors. The depression of the 1930's temporarily halted the state's progress, but recovery was stimulated by increased federal and state government assistance to business and agriculture. Beginning in the 1950's under Governor Luther H. Hodges (1954–61), the state sought to diversify its economy, which was heavily dependent on the production of textiles, furniture, and tobacco. Various progressive economic and social measures were enacted under governors Terry Sanford (1961–65) and Robert W. Scott (1969–73).

Throughout the 1960's, compliance with court-ordered desegregation of the public schools was mainly peaceful. In the mid-1970's, North Carolina was severely affected by inflation and recession-caused unemployment. The 1980 census showed that the state's population had increased more than 15 per cent in the preceding 10 years, making North Carolina the 10th most populous state. During the 1980's, the economy was strong. Also, the population grew at nearly the same rate as in the previous decade.

During the 1990's, the state's economy was helped by its technology sector, centered in the Research Triangle area of Raleigh-Durham-Chapel Hill. While the economy improved in the areas of technology, as well as agricultural production, demand for work in such traditional industries as tobacco and textiles declined. A need for improved government services such as health services and highways followed the increase in the state's population. In 1999, the Charlotte school district discontinued busing minority students into the area to force integration because a federal judge ruled that all instances of intentional discrimination seemed to have stopped. In the same year, Hurricane Floyd caused billions of dollars of damage to the eastern part of the state. It was one of the worst natural disasters in North Carolina's history.