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The institutions of the Roman republic, born for governing a city-state, were unfit to rule over such a large empire. Furthermore, there was discontent both inside Rome and between Rome and its Italic allies, and the tension favored military commanders, who started taking dictatorial powers. The first of these was Sulla, who prevented an overthrow of the republic by Marius but became a sort of "lord protector" of the Senate until his death (78 BC). After him came Julius Caesar, who after conquering the Gaul (present day France) won a civil war against Pompey but was assassinated by senators fearing he would start a monarchy, in 44 BC.

crisis arose in Italian society as a result of the First World War, social inequalities, and the consequent tension between Marxist and left-wing parties on one side and conservative liberals on the other. This crisis led to the advent of Fascism, which destroyed freedoms and civil rights, and establishing a dictatorship. Fascism broke the continuity of the parliamentary tradition. The support of ruling elite and especially Italian monarchy was crucial for the seizure of power by Benito Mussolini. After the March on Rome, the King Vittorio Emmanuele III refused to sign a decree to declare a state of siege, and asked Mussolini to form a new government. This King's decisions were taken in accordance with the Statuto, but in contrast with the parliamentary practice of Italian liberal state.

As Germany annexed Austria and moved against Czechoslovakia, Italy saw itself becoming a second-rate member of the Axis. The imminent birth of an Albanian royal child meanwhile threatened to give Zog a lasting dynasty. After Hitler invaded Czechoslovakia (March 15, 1939) without notifying Mussolini in advance, the Italian dictator decided to proceed with his own annexation of Albania. Italy's King Victor Emmanuel III criticized the plan to take Albania as an unnecessary risk.

Significant changes are occurring in the composition of this trade. More value-added products such as office machinery and aircraft are becoming the principal U.S. exports to Italy. The change reveals the growing sophistication of the Italian market, and bilateral trade should expand further. In 2000 the United States imported about $24.5 billion in Italian goods while exporting about $12.4 billion in U.S. goods to Italy. U.S. foreign direct investment in Italy at the end of 1999 exceeded $14.1 billion.

Under the 1947 peace treaty, minor adjustments were made to Italy's frontier with France, the eastern border area was transferred to Yugoslavia, and the area around the city of Trieste was designated a free territory. In 1954, the free territory, which had remained under the administration of U.S.–U.K. forces (Zone A, including the city of Trieste) and Yugoslav forces (Zone B), was divided between Italy and Yugoslavia, principally along the zonal boundary.

From 1992 to 1997, Italy faced significant challenges as voters (disenchanted with past political paralysis, massive government debt, extensive corruption, and organized crime's considerable influence) demanded political, economic, and ethical reforms. In 1993 referendums, voters approved substantial changes, including moving from a proportional to a largely majoritarian electoral system and the abolishment of some ministries (some of which have however been reintroduced with only partly modified names).

Italy strengthened its ties with Germany on May 22, 1939 when both Nations signed the Pact of Steel This document solidified the alliance between the two regimes.

Italy has few natural resources. With much of the land unsuited for farming, it is a net food importer. There are no substantial deposits of iron, coal, or oil. Proven natural gas reserves, mainly in the Po Valley and offshore Adriatic, have grown in recent years and constitute the country's most important mineral resource. Most raw materials needed for manufacturing and more than 80% of the country's energy sources are imported. Italy's economic strength is in the processing and the manufacturing of goods, primarily in small and medium-sized family-owned firms. Its major industries are precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods, and fashion and clothing.

The musical influence of Italian composers Palestrina, Monteverdi, Corelli and Vivaldi proved epochal; in the 19th century, Italian romantic opera flourished under composers Gioacchino Rossini, Giuseppe Verdi, and Giacomo Puccini. Contemporary Italian artists, writers, filmmakers, architects, composers, and designers continue to contribute significantly to Western culture.

Europe's Renaissance period began in Italy during the 14th and 15th centuries. Literary achievements, such as the poetry of Dante, Petrarch, Tasso, and Ariosto and the prose of Boccaccio, Machiavelli, and Castiglione exerted a tremendous and lasting influence on the subsequent development of Western culture, as did the painting, sculpture, and architecture contributed by giants such as Filippo Brunelleschi, Leonardo da Vinci, Raffaello, Botticelli, Fra Angelico, and Michelangelo. Modern artists include the sculptor Tommaso Geraci.

In 1929 Mussolini signed the Lateran Pacts with the Catholic Church (with whom Italy was in conflict since the annexation of Rome in 1870), leading to the formation of the tiny independent state of Vatican City. He was initially in friendly terms with France and Britain, but the situation changed in 1935-36, when Italy invaded Ethiopia despite their opposition (Second Italo-Abyssinian War); because of this and of the ideological affinities with the Nazi party led by Hitler,

In the fifties Italy became a member of the NATO alliance and an ally of the United States, which helped to revive the Italian economy through the Marshall Plan. In the same years, Italy also became a member of the European Economical Community (EEC), which later transformed into the European Union (EU).

Unions claim to represent 40% of the work force. Most Italian unions are grouped in three major confederations--the Italian General Confederation of Labor (CGIL), the Italian Confederation of Labor Unions (CISL), and the Union of Italian Labor (UIL), which together claim 35% of the work force. These confederations formerly were associated with important political parties or currents, but they have formally terminated such ties. Nowadays, the three often coordinate their positions before confronting management or lobbying the government. The three major confederations have an important consultative role on national social and economic issues.