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The bloody repercussions of the 1916 Easter Rising in Dublin added impetus to the push for Irish independence and in Britain's 1918 general election the Irish republicans won a large majority of the Irish seats. They declared the country independent and formed the first Dail Eireann (Irish assembly or lower house), under the leadership of Eamon de Valera, a surviving hero of the Easter Rising. This provoked the Anglo-Irish war, which lasted from 1919 to the middle of 1921. The Anglo-Irish Treaty of 1921 gave independence to 26 Irish counties, and allowed six, largely Protestant, Ulster counties the choice of opting out. The Northern Irish parliament came into being, with James Craig as its first prime minister. The politics of the North became increasingly divided on religious grounds, and discrimination against Catholics was rife in politics, housing, employment and social welfare. The south of the island was finally declared a republic in 1948, and left the British Commonwealth in 1949.

Instability in the North began to reveal itself in the 1960s and when a peaceful civil rights march in 1968 was violently broken up by the Royal Ulster Constabulary (RUC), the Troubles were under way. British troops were sent to Derry and Belfast in August 1969; they were initially welcomed by the Catholics, but it soon became clear that they were the tool of the Protestant majority. Peaceful measures had clearly failed and the Irish Republican Army (IRA), which had fought the British during the Anglo-Irish war, re-surfaced. The upheaval was punctuated by seemingly endless tit-for-tat killings on both sides, an array of everchanging acronyms, the massacre of civilians by troops, the internment of IRA sympathisers without trial, the death by hunger strike of the imprisoned and the introduction of terrorism to mainland Britain.

The North lost its vestige of parliamentary independence and has been ruled from London ever since. The Anglo-Irish Agreement of 1985 gave the Dublin government an official consultative role in Northern affairs for the first time. The jubilantly received ceasefire of 1994 was undermined by further murders, the reoccurrence of terrorism in Britain and the perceived intransigence of the British government in Whitehall. The mood shifted again with the election of Tony Blair in 1997 with a huge Labour majority to support him. The two sides resumed discussions and, in 1998, formulated a peace plan that offered a degree of self-government for the North and the formulation of a North-South Council that would ultimately be able to implement all policies if agreed to by the governments in Belfast and Dublin. As part of the plan, which was fully endorsed by a referendum, the South gave up its constitutional claim to the North.

By the late 1990s the Republic's economy was booming, mainly thanks to an injection of investment funds from the EU that have helped renovate the country's infrastructure. It's been said that Ireland has skipped straight from an agricultural economy to a post-industrial one, as large computer and telecommunications firms have been moving in, bringing jobs and investment. The century and a half tradition of emigration has slowed and possibly even stopped, as young people are staying or returning from abroad for new jobs in new industries. The downside? Try and buy a modest two bedroom house in Dublin now and you're looking at little change from US$1 million.