The Government of Ireland Act passed by the British Parliament in 1920 authorized separate Home Rule for the northern 6 counties of Ireland and the southern 26 counties. The act, ignored by the south, was accepted by Northern Ireland, and the first parliament met in 1921. Lord Craigavon became prime minister. When the treaty between Great Britain and southern Ireland was signed in December, 1921, Northern Ireland was given 30 days in which to join the new Irish Free State. It chose to remain united with Great Britain. In 1925 the boundary fixed provisionally in 1920 between north and south was made permanent.

During World War II the establishment of war industries in Northern Ireland helped promote the industrialization of the country. With industrialization and improved agricultural methods came increasing prosperity. When the Republic of Ireland was formed in 1949, Northern Ireland was guaranteed its continued separate existence by the British Parliament.

The Catholic portion of the population—about one-third of the total—had no wish to remain separate, however. Dominated and largely ignored by the Protestant majority, the Catholics had little voice in government and were consistently denied the more desirable jobs and housing. The outlawed Irish Republican Army (IRA), operating secretly from the Republic of Ireland, made sporadic attacks along the border in support of the reunification of Ireland.

In 1969 hostility between Protestants and Catholics grew so intense that rioting started. As the Catholics were outnumbered, Britain sent in troops to protect them and to try to restore order. The IRA also came in to protect and encourage the Catholics, and the Provisional IRA, or militant branch, was soon committing acts of terrorism against both British troops and Protestant civilians. When, in 1971, Northern Ireland began interning (imprisoning) men suspected of belonging to the IRA, the Catholics united in their support of the militants. Terrorism was taken up by the Protestants, also, and by 1972 the country neared civil war.

At that time Britain suspended the separate government of Northern Ireland and placed the country under direct British rule. Acts of terrorism increased sharply. The Republic of Ireland disavowed any support of the IRA, and the main branch of that organization began to draw away from the Provisionals.

In 1973 a referendum was held on reunification and was easily carried by those favoring continued union with Britain. Britain then released a White Paper that contained proposals for Britain to give up direct control of Northern Ireland and give power to an elected assembly in which Catholics would have proportional representation. Britain pledged, however, to keep Northern Ireland in the United Kingdom as long as the majority of Northern Ireland's people so desired.

The assembly was elected in 1974 but was suspended that year because of intense Protestant opposition. Great Britain then resumed direct control. A new assembly, intended to gradually assume governmental power in Northern Ireland, was elected in 1982. Its members failed to cooperate with each other and it was dissolved in 1986.

Meanwhile, in 1985, Great Britain and the Republic of Ireland signed the Anglo-Irish Agreement, which gave the Republic a consultative role in the affairs of Northern Ireland. In 1993 Britain and the Republic of Ireland issued a joint declaration on Northern Ireland. One of the principles outlined was that Sinn Fein, the political arm of the Provisional IRA, would be included in negotiations concerning the future of Northern Ireland provided that the Provisional IRA establish a permanent cease-fire and Sinn Fein renounce the use of violence. Many Protestant leaders in Northern Ireland opposed the declaration. In 1994 the Provisional IRA agreed to end hostilities in return for Sinn Fein's inclusion in Anglo-Irish negotiations over Northern Ireland's future. Despite setbacks, including a brief return to hostilities, the parties signed an agreement in 1998 creating the Northern Ireland Assembly and ending direct rule from London.