The Indonesian invasion of East Timor, known in Indonesia as Operation Lotus (Indonesian: Operasi Seroja), began on 7 December 1975 when the Indonesian military (ABRI/TNI) invaded East Timor under the pretext of anti-colonialism and anti-communism to overthrow the Fretilin government that had emerged in 1974. The overthrow of the popular and short-lived Fretilin-led government sparked a violent quarter-century occupation in which approximately 100,000–180,000 soldiers and civilians are estimated to have been killed or starved to death. The Commission for Reception, Truth and Reconciliation in East Timor documented a minimum estimate of 102,000 deaths as a result of the conflict in East Timor during the period 1974 to 1999, as well as a large part of the consequences of Indonesian war crimes during the invasion of Dili, including 18,600 violent killings and 84,200 deaths from disease and starvation; Indonesian forces and their auxiliaries combined were responsible for 70% of the killings.

During the first months of the occupation, the Indonesian military faced heavy insurgency resistance in the mountainous interior of the island, but from 1977 to 1978, the military procured new advanced weaponry from the United States, and other countries, to destroy Fretilin's framework. The last two decades of the century saw continuous clashes between Indonesian and East Timorese groups over the status of East Timor, until 1999, when a majority of East Timorese voted overwhelmingly for independence (the alternative option being "special autonomy" while remaining part of Indonesia). After a further two and a half years of transition under the auspices of three different United Nations missions, East Timor achieved independence on 20 May 2002.

East Timor owes its territorial distinctiveness from the rest of Timor, and the Indonesian archipelago as a whole, to being colonised by the Portuguese, rather than the Dutch; an agreement dividing the island between the two powers was signed in 1915. Colonial rule was replaced by the Japanese during World War II, whose occupation spawned a resistance movement that resulted in the deaths of 60,000 people, 13 percent of the population at the time. Following the war, the Dutch East Indies secured its independence as the Republic of Indonesia and the Portuguese, meanwhile, re-established control over East Timor.

According to the pre-1974 Constitution of Portugal, East Timor, known until then as Portuguese Timor, was an "overseas province", just like any of the provinces outside continental Portugal. "Overseas provinces" also included Angola, Cape Verde, Portuguese Guinea, Mozambique, São Tomé and Príncipe in Africa; Macau in China; and had included the territories of Portuguese India until 1961, when India invaded and annexed the territory.

In April 1974, the left-wing Movimento das Forças Armadas (Armed Forces Movement, MFA) within the Portuguese military mounted a coup d'état against the right-wing authoritarian Estado Novo government in Lisbon (the so-called "Carnation Revolution"), and announced its intention to rapidly withdraw from Portugal's colonial possessions (including Angola, Mozambique and Guinea, where pro-independence guerrilla movements had been fighting since the 1960s).

Unlike the African colonies, East Timor did not experience a war of national liberation. Indigenous political parties rapidly sprang up in Timor; the Timorese Democratic Union (União Democrática Timorense, UDT) was the first political association to be announced after the Carnation Revolution. UDT was originally composed of senior administrative leaders and plantation owners, as well as native tribal leaders. These leaders had conservative origins and showed allegiance to Portugal, but never advocated integration with Indonesia. Meanwhile, Fretilin (the Revolutionary Front of Independent East Timor) was composed of administrators, teachers, and other "newly recruited members of the urban elites." Fretilin quickly became more popular than UDT due to a variety of social programs it introduced to the populace. UDT and Fretilin entered into a coalition by January 1975 with the unified goal of self-determination. This coalition came to represent almost all of the educated sector and the vast majority of the population. The Timorese Popular Democratic Association (Portuguese: Associação Popular Democratica Timorense; APODETI), a third, minor party, also sprang up, and its goal was integration with Indonesia. The party had little popular appeal.

By April 1975, internal conflicts split the UDT leadership, with Lopes da Cruz leading a faction that wanted to abandon Fretilin. Lopes da Cruz was concerned that the radical wing of Fretilin would turn East Timor into a communist front. Fretilin called this accusation an Indonesian conspiracy, as the radical wing did not have a power base. On 11 August, Fretilin received a letter from UDT leaders terminating the coalition.

The UDT coup was a "neat operation", in which a show of force on the streets was followed by the takeover of vital infrastructure, such as radio stations, international communications systems, the airport and police stations. During the resulting civil war, leaders on each side "lost control over the behavior of their supporters", and while leaders of both UDT and Fretilin behaved with restraint, the uncontrollable supporters orchestrated various bloody purges and murders. UDT leaders arrested more than 80 Fretilin members, including future leader Xanana Gusmão. UDT members killed a dozen Fretilin members in four locations. The victims included a founding member of Fretilin, and a brother of its vice-president, Nicolau Lobato. Fretilin responded by appealing successfully to the Portuguese-trained East Timorese military units. UDT's violent takeover thus provoked the three-week long civil war, in pitting its 1,500 troops against the 2,000 regular forces now led by Fretilin commanders.^{[citation needed]} When the Portuguese-trained East Timorese military switched allegiance to Fretilin, it came to be known as Falintil.