After World War II, the Soviet Union appointed German Communists to local offices and set up a system much like that of the Soviet Union. Banks, farms, and industries were seized and reorganized. People suspected of opposing Communism were thrown into prison camps. In 1946, the Communists forced the Social Democratic Party to join them in forming the Socialist Unity Party. The party came under control of the Communist leader Walter Ulbricht. Ulbricht became first secretary, or head, of the Socialist Unity Party. The first secretary (later general secretary) was the most powerful leader in East Germany.

A Communist-prepared constitution was adopted in May 1949. On October 7, the Soviet zone became the German Democratic Republic (commonly called East Germany), with East Berlin as its capital. Ulbricht held the real power, though he did not head the government. In October 1955, East Germany became officially independent, but Soviet influence continued. Also in 1955, East Germany joined the Warsaw Pact, an Eastern European military alliance under Soviet command. East Germany's armed forces were established officially in 1956, though special "police" units had been given tanks and other heavy weapons as early as 1952.

The East German economy recovered gradually after 1945, but the standard of living remained much lower than West Germany's. In 1953, Ulbricht tried to increase working hours without raising wages. Strikes and riots broke out in East Berlin and other cities. Soviet tanks and troops crushed the revolt. Living and working conditions slowly improved, but many people remained dissatisfied. Every week, thousands of East Germans fled to West Germany. Almost 3 million East Germans left, and the labor force fell sharply. Most refugees fled through Berlin because the Communists had sealed off the East-West border.

In August 1961, the Communists built the Berlin Wall between East and West Berlin. They also strengthened barriers around the rest of West Berlin and along the border between East and West Germany. From 1961 to 1989, when the borders were opened, hundreds died trying to escape from East Germany, including many who tried to cross the Berlin Wall.

In 1971, Ulbricht resigned as head of the Socialist Unity Party. Erich Honecker, a member of the party's Central Committee, succeeded him. Under Honecker, East Germany improved its relations with many non-Communist nations. Before 1960, only the Soviet Union and several other Communist countries had diplomatic relations with East Germany. But eventually, East Germany established relations with other nations.

East Germany experienced major changes in 1989. In many Eastern European nations, people demonstrated against their Communist governments. Communist Hungary removed its barriers on its border with non-Communist Austria. Thousands of East Germans went to Hungary, crossed into Austria, and then moved to West Germany. Throughout East Germany, citizens protested for more freedom. In October, the growing pressure forced Honecker to resign as head of the party and from his government positions. He was succeeded in all his positions by another Communist, Egon Krenz. In November 1990, the German government charged Honecker with manslaughter for ordering border guards to shoot East Germans trying to escape to West Germany during his leadership. Honecker became ill and died in 1994 while in exile in Chile.

In a dramatic change in policy, the East German government announced on Nov. 9, 1989, that it would open its borders and permit its citizens to travel freely. The opening of the Berlin Wall, long a symbol of the East German government's control of its citizens, was part of this policy change. Thousands more East Germans moved to West Germany. During this time, protests continued. Non-Communist political parties and organizations were started. In December, Krenz resigned as party head and from his government positions. Hans Modrow, chairman of East Germany's cabinet, took control of the government, though he was not a party head.

On March 18, 1990, East Germans voted in free parliamentary elections for the first time. The Christian Democratic Union, a non-Communist party, won the most seats in parliament. Together with the Social Democrats and some smaller parties, the Christian Democratic Union formed a government with CDU leader Lothar de Maiziere as its head. The Socialist Unity Party, which had been renamed the Party of Democratic Socialism, won only about 17 percent of the seats in the legislature.