A 1910 revolution deposed the Portuguese monarchy starting the First Republic. Political chaos, several strikes, harsh relations with the Church, and considerable economic problems aggravated by a disastrous military intervention in the First World War led to a military coup d'état in 1926, installing the Second Republic that would later become the Estado Novo in 1933, led by António de Oliveira Salazar, which transformed Portugal into a Fascist leaning state. India invaded and annexed Portuguese India in 1961. Independence movements also became active in Angola, Mozambique and Portuguese Guinea, and a series of colonial wars started.

The burden of so many overseas wars and the lack of political and civil freedoms led to the end of the regime after the Carnation Revolution in April 25 of 1974, an effectively bloodless left-wing military coup, that installed a new democratic regime. In 1975, Portugal had its first free elections and granted independence to its colonies in Africa, and Indonesia invaded and annexed the Portuguese province of Timor in Asia before legal recognition of its independence by Portugal. In 1986, Portugal entered the EEC, today's European Union. In 1999, the Asian dependency of Macau, was returned to Chinese sovereignty, today seen as a success by China and Portugal. After a referendum in 1999, East Timor voted for independence and Portugal recognized it in 2002.