After the assassination of the Austrian Archduke Franz Ferdinand in Sarajevo on 28 June 1914, a series of crises escalated quickly. A general war began on 28 July with a declaration of war on Serbia by Austria-Hungary. Austria-Hungary drafted 9 million soldiers in World War I, of which 4 million were from the kingdom of Hungary. Austria-Hungary fought on the side of Germany, Bulgaria and Ottoman Empire—the so-called Central Powers. They occupied Serbia, and Romania declared war. The Central Powers then conquered southern Romania and the Romanian capital of Bucharest. In November 1916, Emperor Franz Joseph died; the new monarch, Emperor Charles I of Austria (IV. Károly), sympathized with the pacifists in his realm.

In the east, the Central Powers repelled attacks from the Russian Empire. The Eastern Front of the so-called Entente Powers allied with Russia completely collapsed. Austria-Hungary withdrew from the defeated countries. On the Italian front, the Austro-Hungarian army could not make more successful progress against Italy after January 1918. Despite successes on the Eastern Front, Germany suffered stalemate and eventual defeat on the more determinant Western Front.

By 1918, the economic situation had deteriorated alarmingly in Austria-Hungary; strikes in factories were organized by leftist and pacifist movements, and uprisings in the army had become commonplace. In the capital cities of Vienna and Budapest, the Austrian and the Hungarian leftist liberal movements and their leaders supported the separatism of ethnic minorities. Austria-Hungary signed the Armistice of Villa Giusti in Padua on 3 November 1918. In October 1918, the personal union between Austria and Hungary was dissolved.