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At the beginning of World War I Italy remained neutral, since the Triple Alliance had only defensive purposes, and the war was started by Austria. However, both the central empires and the Entente tried to attract Italy on their side, and in April 1915 the Italian government agreed (London Pact) to declare war on Austria in exchange for several territories (Trento, Trieste, Istria, Dalmatia). In October 1917, the Austrians, having received German reinforcements, broke the Italian lines at Caporetto, but the Italians (helped by their allies) stopped their advance on the river Piave, not far from Venice. After another year of trench warfare, and a successful Italian offensive in autumn 1918, the exhausted Austria surrendered to the allies on November 4 1918, soon followed by Germany.

The Church (and especially the bishop of Rome, the pope) had played an important political role since the times of Constantine, who tried to include it in the imperial administration.

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,

The Guardia di Finanza (a specialised police for tax and financial crimes) is also a military corps, but it is going to be transformed, expectedly in a short time, into a civil administration, as previously happened for the State Police, Forestry Police and Prisons Police.

After the German army defeated Poland, Denmark, and France, a still-jealous Mussolini decided to use Albania as a springboard to invade Greece. The Italians launched their attack on October 28, 1940, and at a meeting of the two fascist dictators in Florence, Mussolini stunned Hitler with his announcement of the Italian invasion. Mussolini counted on a quick victory, but Greek resistance fighters halted the Italian army in its tracks and soon advanced into Albania. The Greeks took Korēė and Gjirokastėr and threatened to drive the Italians from the port city of Vlorė.

All on its treat agriculture is typical of the division between the agricultures of the northern and southern countries of the European Union. The northern part of Italy produces primarily grains, rice, corn, sugarbeets, soybeans, meat, and dairy products, while the south specializes in producing fruits, vegetables, olive oil, wine, and durum wheat.