The Kingdom of Italy was governed by the National Fascist Party from 1922 to 1943 with Benito Mussolini as prime minister transforming the country into a totalitarian dictatorship. The Fascists crushed political opposition, while promoting economic modernization, traditional social values and a rapprochement with the Roman Catholic Church. They also promoted imperialism, resulting in the expansion of the Italian Empire.

According to historian Stanley G. Payne, "[the] Fascist government passed through several relatively distinct phases". The first phase (1922–1925) was nominally a continuation of the parliamentary system, albeit with a "legally-organized executive dictatorship". In foreign policy, Mussolini ordered the pacification of Libya against rebels in the Italian colonies of Tripolitania and Cyrenaica (eventually unified in Italian Libya), inflicted the bombing of Corfu, established a protectorate over Albania, and annexed the city of Fiume into Italy after a treaty with the Kingdom of Yugoslavia. The second phase (1925–1929) was "the construction of the Fascist dictatorship proper". The third phase (1929–1935) saw less interventionism in foreign policy. The fourth phase (1935–1940) was characterized by an aggressive foreign policy: the Second Italo-Ethiopian War, which was launched from Eritrea and Somaliland; confrontations with the League of Nations, leading to sanctions; growing economic autarky; the invasion of Albania; and the signing of the Pact of Steel. The fifth phase (1940–1943) was World War II itself, ending in military defeat, while the sixth and final phase (1943–1945) was the rump Salò Government under German control.

Italy was a leading member of the Axis powers in World War II, battling with initial success on several fronts. However, after the German-Italian defeat in Africa, the successes of the Soviet Union on the Eastern Front, and the subsequent Allied landings in Sicily, King Victor Emmanuel III overthrew and arrested Mussolini. The new government signed an armistice with the Allies in September 1943. Germany seized control of the northern half of Italy and rescued Mussolini, setting up the Italian Social Republic (RSI), a collaborationist puppet state which was ruled by Mussolini and Fascist loyalists.

From that point onward, the country descended into a civil war, and the large Italian resistance movement continued to wage its guerrilla war against the German and RSI forces. Mussolini was captured and killed by the resistance on 28 April 1945, and hostilities ended the next day. Shortly after the war, civil discontent led to the 1946 institutional referendum on whether Italy would remain a monarchy or become a republic. The Italians decided to abandon the monarchy and form the Italian Republic, the present-day Italian state.

After rising to power, the Fascist regime of Italy set a course to becoming a one-party state and to integrate Fascism into all aspects of life. A totalitarian state was officially declared in the Doctrine of Fascism of 1935:

The Fascist conception of the State is all-embracing; outside of it no human or spiritual values can exist, much less have value. Thus understood, Fascism is totalitarian, and the Fascist State—a synthesis and a unit inclusive of all values—interprets, develops, and potentiates the whole life of a people.
— Doctrine of Fascism, 1935

With the concept of totalitarianism, Mussolini and the Fascist regime set an agenda of improving Italian culture and society based on ancient Rome, personal dictatorship and some futurist aspects of Italian intellectuals and artists. Under Fascism, the definition of the Italian nationality was to rest on a militarist foundation and the Fascist's "new man" ideal, in which loyal Italians would rid themselves of individualism and autonomy and see themselves as a component of the Italian state and be prepared to sacrifice their lives for it. Under such a totalitarian government, only Fascists would be considered "true Italians", and membership and endorsement of the Fascist Party was necessary for people to gain "Complete Citizenship"; those who did not swear allegiance to Fascism would be banished from public life and could not gain employment. The Fascist government also reached out to Italians living overseas to endorse the Fascist cause and identify with Italy rather than their places of residence. Despite efforts to mould a new culture for fascism, Fascist Italy's efforts were not as drastic or successful in comparison to other one-party states like Nazi Germany and the Soviet Union in creating a new culture.

Mussolini's propaganda idolized him as the nation's saviour, and the Fascist regime attempted to make him omnipresent in Italian society. Much of Fascism's appeal in Italy was based on Mussolini's popularity and charisma. Mussolini's passionate oratory and the personality cult around him were displayed at huge rallies and parades of his Blackshirts in Rome, which served as an inspiration to Adolf Hitler and the Nazi Party in Germany.