On October 7, 1949, following the partition of Germany at the end of World War II, the Deutsche Demokratische Republik (DDR) was formed under the governance of the Sozialistische Einheitspartei Deutschlands (SED). The SED had been formed from two previous political parties, the Kommunistische Partei Deutschlands (KPD) and the Sozialdemokratische Partei Deutschlands (SPD). In 1955, the Soviet Occupation Zone was officially declared to be a sovreign state. Under the SED, the infrastructure, industrial plants, and public property were all nationalized. Additionally, all political parties and mass organizations were controlled under an umbrella organization known as the Nationale Front (NF).

Initially, the SED was led by Wilhelm Pieck, who served as the first an only president of the DDR from 1949 to 1960. After 1950, the actual power in the DDR was held by Walter Ulbricht, the First Secretary of the SED. During this beginning period of the DDR's history, the new state's economy was severely weakened by war reparations to the USSR. This problem was exacerbated by the heavy emigration to the West that was induced by the increased poverty caused by the war reparations. In response to the emigration problem, the DDR closed the Inner German border in the 1950s. On the night of August 12, 1961, East German soldiers began construction on the Berlin Wall.

From 1949 until the 1970s, West Germany (Federal Republic of Germany) considered the DDR to be an illegally constituted state. It was only in 1971, under Chancellor Willy Brandt, that West Germany established normal relations with the DDR. That same year, Soviet leader Leonid Brezhnev deposed Walter Ulbricht as the DDR head of state. Ulbricht's policies were experimenting with liberal reform, so Ulbricht was replaced by Erich Honecker, who increased government controls on the population.

In 1989, public outrage over local government elections led to large amounts of illegal emigration from the DDR. In August, Hungary unsealed its border and lifted restrictions, leading to over 13,000 people leaving the DDR to the West via Hungary. In October, public demonstrations led to Erich Honecker's resignation. His replacement, Egon Krenz, was slightly more moderate. On November 9, 1989, sections of the Berlin Wall were opened. The governing party of the DDR soon resigned and attempts to establish a democratic DDR were overwhelmed by calls for reunification with West Germany. Later that year, the 2 + 4 Talks were held between the two Germanys, France, the United Kingdom, the United States, and the USSR. The five original East German states, which were abolished in 1952, were reestablished, and conditions for reunification were agreed upon. On October 3, 1990, the five East German states officially joined the Federal Republic of Germany.