After the death of Albert I, his son, Leopold III, succeeded the Belgian throne. As during his father’s reign, Leopold’s was also confronted by war, World War II, which broke out on September 1, 1939 when Germany invaded Poland. However, Belgium kept its neutrality. Despite the fact that Germany and France were in war, until May 10, 1940, there was no fighting on the Western Front.

However, Germany disregarded the neutrality of its western neighbours and invaded the Netherlands, Belgium, Luxembourg and France. Leopold resisted, but finally surrendered and became a prisoner of war. The country was occupied and Leopold remained in it. He requested a truce, without asking the government, but Belgian representatives, assembled in Limoges, France, condemned his action. A Belgian government-in-exile was established in Bordeaux, and it demanded the king to abdicate. Later, when France was also occupied, the Belgian political leaders fled to London.

King Leopold III met Adolf Hitler in November 1940, in Berchtesgaten, resulting in the release of 50,000 Belgian soldiers and more food supply for his occupied country. Many thought Leopold to be a collaborator, including the Western Allies. The German administration in Belgium tried to win followers of the new order. The politician Hendrik de Man accepted the German order and dispelled the Belgian Workers Party in June 1940. The Germans organised a Flemish and Wallonian ‘legion of volunteers against Bolshevism’, which unsuccessfully fought for Germany in the east. The aim of the plan was to ‘Germanise’ the Wallonians by assimilation; they were regarded as "racially, of Nordic stock."

In the autumn of 1940, registration of Belgian Jews commenced, which was the first step in the extermination of 20,000 Belgian Jews. In 1942, the Germans began to deport Jews from Belgium to a concentration camp in Breendonk, in transition to the annihilation camps in the east.

In 1941, the Belgian and Luxembourgian franc was replaced by the German Reichsmark. When Belgium was liberated in 1944, the franc was restored. Belgium was also submitted to air raids of the Allies, especially from the U.S. and British. During the raid on the Erla factory at Morstel on April 5, 1943, where German Messerschmidt planes were repaired, 936 people lost their lives, and 1,342 were injured.