Manyan nasarorin soja, irin su Yaƙin Königgrätz a 1866, sun tilasta wa Sarki Yusufu ya karɓi sauye-sauye na cikin gida.Don gamsar da 'yan aware na Hungary, sarki ya yi yarjejeniya mai kyau da Hungary, yarjejeniyar Austro-Hungary ta 1867 wanda Ferenc Deák ya yi shawarwari, wanda ta hanyar mulkin mallaka na Austria-Hungary ya kasance.Majalisun biyu sun gudanar da mulki daban-daban daga manyan biranen biyu, masu sarauta guda daya da manufofin kasashen waje da na soja.Ta fuskar tattalin arziki, daular ta kasance ƙungiyar kwastan.Firayim Ministan Hungary na farko bayan sasantawar shi ne Count Gyula Andrássy.An maido da tsohon kundin tsarin mulkin Hungary, kuma aka naɗa Franz Joseph sarkin Hungary.Ƙasar Austria-Hungary ita ce ƙasa ta biyu mafi girma a Turai bayan Rasha.An kiyasta yankunanta a fadin murabba'in kilomita 621,540 (239,977 sq mi) a shekarar 1905. ^[72] Bayan Rasha da Daular Jamus , ita ce kasa ta uku mafi yawan al'umma a Turai.Zamanin ya samu gagarumin ci gaban tattalin arziki a yankunan karkara.Tattalin arzikin Hungarian da ya kasance baya baya ya zama ingantacciyar zamani da masana'antu a farkon karni na 20, ko da yake noma ya kasance mafi rinjaye a cikin GDP har zuwa 1880. A cikin 1873, tsohon babban birnin kasar Buda da Óbuda (Buda na d ¯ a) sun haɗu bisa hukuma tare da birni na uku, Pest. , don haka ƙirƙirar sabon birni na Budapest.Kwaro ya girma ya zama cibiyar gudanarwa, siyasa, tattalin arziki, kasuwanci da al'adun kasar.Ci gaban fasaha ya haɓaka masana'antu da haɓaka birane.GDP na kowane mutum ya karu da kusan 1.45% a kowace shekara daga 1870 zuwa 1913, idan aka kwatanta da sauran ƙasashen Turai.Manyan masana'antu a cikin wannan faɗaɗa tattalin arziki sune wutar lantarki da fasaha na lantarki, sadarwa, da sufuri (musamman ma'auni, tram da aikin jirgin ruwa).Mabuɗin alamun ci gaban masana'antu sune damuwa na Ganz da Ayyukan Tungsram.Yawancin cibiyoyin gwamnati da tsarin gudanarwa na zamani na Hungary an kafa su a wannan lokacin.Ƙididdigar ƙasar Hungary a cikin 1910 (ban da Croatia), an ƙididdige yawan yawan jama'a na Hungarian 54.5%, Romanian 16.1%, Slovak 10.7%, da Jamusanci 10.4%.^[73] Addinin da ya fi yawan mabiya shine Roman Katolika (49.3%), sai Calvinism (14.3%), Orthodoxy na Girka (12.8%), Katolika na Girka (11.0%), Lutheranism (7.1%), da Yahudanci. (5.0%)