Following the Romanian Revolution which toppled Romania's hardline Communist government and the execution of dictator Nicolae Ceaușescu in December 1989, the National Salvation Front seized power, led by Ion Iliescu. The Front transformed itself into a political party in short time and overwhelmingly won the general election of May 1990, with Iliescu as president. The first half of 1990 was marked protests, some of them violent. Most notable was the brutal intervention of coal miners of the Jiu Valley, called in to suppress rioting in central Bucharest.

Subsequently, the Romanian government undertook a programme of free market economic reforms and privatization, following a gradualist line rather than shock therapy throughout the early and mid 1990s. Economic reforms have continued, although there was little economic growth until the 2000s. Social reforms soon after the revolution included easing of the former restrictions on contraception and abortion. Later governments implemented further social policy changes.

Political reforms have been based on a new democratic constitution adopted in 1991. The FSN split that year, beginning a period of coalition governments that lasted until 2000, when Iliescu's Social Democratic Party (then the Party of Social Democracy in Romania, PDSR, now PSD), returned to power and Iliescu again became President, with Adrian Năstase as Prime Minister. This government fell in the 2004 elections amid allegations of corruption, and was succeeded by further unstable coalitions which have been subject to similar allegations.

In recent years, Romania has become more closely integrated with Western institutions, becoming a member of the North Atlantic Treaty Organization (NATO) in 2004 and of the European Union (EU) in 2007.

Following political instability in the wake of the cancellation of the 2024 presidential election due to alleged Russian interference favouring first round winner Călin Georgescu, a new election has held in May 2025 with Nicușor Dan assuming the presidency.

1989 marked the fall of Communism in Eastern Europe. A mid-December protest in Timișoara against the eviction of a Hungarian minister (László Tőkés) grew into a country-wide protest against the Ceaușescu régime, sweeping the dictator from power.

On 21 December, President Nicolae Ceaușescu had his apparatus gather a mass-meeting in Bucharest downtown in an attempt to rally popular support for his regime and publicly condemn the mass protests of Timișoara. This meeting mirrored the mass-meeting gathered in 1968 when Ceaușescu had spoken out against the invasion of Czechoslovakia by the Warsaw Pact countries. This time, however, the people turned angry and riot broke out. During the events of the following week, marked by confusion and street fighting, it is estimated that 1,051 people lost their lives. Ceaușescu was arrested in Târgoviște. After a summary trial by a kangaroo court, he and his wife were executed on 25 December. Most members of the government, as well as a limited number of lower level officials were convicted for perpetrating or enabling the violence in trials that lasted several years.

During the Romanian Revolution, power was taken by a group called the National Salvation Front (FSN), which gathered dissidents, both from within the Communist Party and non-affiliated. The FSN quickly assumed the mission of restoring civil order and immediately took democratic measures. The Communist Party was de facto banned, and Ceaușescu's most unpopular measures, such as bans on abortion and contraception, were rolled back.