In January, 1945, a provisional government signed an armistice with the Allies. Although Soviet occupation troops were in the country, the Communist party failed to win the 1945 elections. In 1946 Hungary became a republic. Sweeping land reforms were made to benefit the small farmers.

In 1947 the Communists were strong enough to become the largest party in a coalition government and with Soviet support gained control of Hungary. In 1948 they forced the president to resign. Joseph Cardinal Mindszenty, leader of the Catholic Church in Hungary, was imprisoned on charges of treason in 1949. A government reorganization in 1949 followed the model of a Soviet “people's democracy.” Large industries were nationalized and the collectivization of agriculture began.

Imre Nagy, who became premier in 1953, adopted such a liberal policy that he was removed from office by the Communist party in 1955. In 1956 student demonstrations in Budapest flared into armed revolt and spread throughout Hungary. The revolt succeeded and Nagy became head of the revolutionary government. Within a few days, however, Soviet troops moved into Budapest and crushed all opposition. Nagy was captured and eventually tried for treason and executed. János Kádár, general secretary of Hungary's Communist party, then became premier and began reprisals against the revolutionaries. About 190,000 Hungarians fled to the West.

Following the revolution there was a period of harsh rule while Kádár consolidated the government's position. In the early 1960's, however, he began to liberalize the Hungarian regime. Some freedom of speech was allowed, the powers of the secret police were curtailed, and many political prisoners were released. Kádár resigned as premier in 1965, but, as leader of the party, he retained actual control of the government.

In 1968, Hungary instituted the “new economic mechanism,” reforms designed to decentralize state planning and stimulate private enterprise. Many small businesses were permitted to compete and to operate for a profit. These changes resulted in increased availability of consumer goods. Trade with the West was increased. Hungarians were also allowed greater freedom to express themselves politically as well as in their artistic and literary activities.

Despite domestic liberalization, Hungary closely adhered to Communist-bloc foreign policies. The country joined in the 1968 invasion of Czechoslovakia to stamp out its liberalization movement.

During the late 1970's, economic decline led to new reforms, resulting in somewhat less central planning, more private initiative, and greater emphasis on profit. The economy, however, continued to falter, and in 1988 the Communist party ousted Kádár and many of his associates.

In 1989 a government commission set up to review the events of 1956 found that Nagy had been unjustly convicted of treason. Nagy was reburied with full honors. That same year, demands from within the Communist party and by the general public for government reform led to a special party congress. Party members voted in favor of constitutional changes establishing a democracy and abolishing the Communist monopoly on power. Hungary also opened its border with Austria.

Hungary held elections in 1990 for the National Assembly—the first multiparty elections since 1947. A coalition of parties opposed to Communist rule won a majority of seats. Elections in 1994 brought to power the Socialist party, made up mainly of former Communists. In 1999 Hungary joined the North Atlantic Treaty Organization (NATO).

In 2000, Ferenc Madl was elected president. In 2002 elections, a coalition of the Hungarian Socialist Party and Free Democrats took control of the National Assembly. In 2004, Hungary joined the European Union, an organization of European countries that promotes economic and political cooperation among its members. In 2005, Laszló Solyóm was elected president of Hungary. In the 2006 parliamentary elections, the Socialist-led coalition, headed by Prime Minister Ferenc Gyurcsany, retained power.