In the beginning of the 20th Century, King Constantine ruled Greece and Venizelos served as the prime minister. When World War I broke out, Venizelos supported the allies and signed an agreement in 1915 which allowed them to send troops into Thessaloniki. However, King Constantine chose neutrality and did not allow the allied forces into Greek territory. Venizelos was dismissed of his post as prime minister, but in 1916 formed a government in Thessaloniki. Soon after, the Allied Powers forced Constantine to abdicate and his successor became his younger son Alexander.

Venizelos was restored as prime minister and Greece was drawn into the war. After the war, Greece held the Bulgarian coast on the Aegean Sea and parts of European Turkey, including Eastern Thrace and the Dodecanese, without Rhodes and the Zone of the Straits. Izmir was also under Greek influence and rule.

In the 1919–22 Greco-Turkish War, supported and supplied by the Great Powers, Greek forces invaded Smyrna (Izmir) and passed through Ankara. Elections in Greece worried Britain and France, who were concerned about Greece becoming a major power in Europe. Thus, the countries stopped supplying the Greek Army, all but putting an end to the war. But in the summer of 1922, the Turkish Army, led by Mustafa Kemal (Ataturk), conducted a massive and cruel offensive attack against Greece. The Turks captured Smyrna and some 1.3 million Greeks immigrated to Greece, which wreaked havoc on the Greek economy and society, as well as put an end to the Megali Idea (Great Idea), a long-held nationalist aspiration of establishing a Greek state that comprised all ethnic Greeks under the declining Ottoman rule. 

Between the two World Wars, political struggles between Monarchists and Republicans plagued Greece. The country became a republic in 1924, but in 1935 George II succeeded to take back the throne. In 1946, the monarchy was supported by a plebiscite, or referendum, but was eventually abolished in 1974 with a referendum in which more than two-thirds of the population chose Greece as a republic.