The Wessex and the Norse-controlled, East Anglian governments signed the Treaty of Wedmore, which established a boundary between the two kingdoms. The area to the north and east of this boundary became known as the Danelaw because it was under Norse political influence, whilst those areas south and west of it remained under Anglo-Saxon dominance.

Alfred's government set about constructing a series of defended towns or burhs, began the construction of a navy, and organised a militia system (the fyrd) whereby half of his peasant army remained on active service at any one time. To maintain the burhs, and the standing army, he set up a taxation and conscription system known as the Burghal Hidage.