The Kingdom of Romania, under the rule of King Carol II, initially maintained neutrality in World War II. However, fascist political forces, especially the Iron Guard, rose in popularity and power, urging an alliance with Nazi Germany and its allies. As the military fortunes of Romania's two main guarantors of territorial integrity—France and Britain—crumbled in the Battle of France, the government of Romania turned to Germany in hopes of a similar guarantee, unaware that Germany, in the supplementary protocol to the 1939 Molotov–Ribbentrop Pact, had already granted its permission to Soviet claims on Romanian territory.

In the summer of 1940, the USSR occupied Bessarabia and Northern Bukovina, severely weakening Romania and diminishing its international standing. Taking advantage of the situation, Hungary and Bulgaria both pressed territorial claims on Romania. The disputes, arbitrated by Germany and Italy, led to the further losses of Northern Transylvania and Southern Dobruja to Hungary and Bulgaria respectively. The popularity of the Romanian government plummeted, further reinforcing fascist and military factions, who eventually staged a coup in September 1940 that turned the country into a Legionary State under Mareșal Ion Antonescu in partnership with the Iron Guard. Romania officially joined the Axis powers on 23 November 1940. Antonescu assumed full control over Romania in January 1941 and invaded the Soviet Union with the Axis, providing equipment and oil to Germany and committing more troops to the Eastern Front than all other allies of Germany combined. Romanian forces played a large role during fighting in Ukraine, Bessarabia, and in the Battle of Stalingrad. Romanian troops were responsible for the persecution and massacre of 260,000 Jews in Romanian-controlled territories, though half of the Jews living in Romania survived the war. Romania controlled the third-largest Axis army in Europe and the fourth largest Axis army in the world.

The Allies bombed Romania heavily from 1943 onwards, and during the Battle of Romania, Soviet armies occupied the country in 1944. Popular support for Romania's participation in the war faltered, and the German–Romanian fronts collapsed under the Soviet onslaught. King Michael of Romania engineered the 1944 Romanian coup d'état that deposed the Antonescu regime and put Romania on the side of the Allies for the remainder of the war. Despite this late association with the victors, Greater Romania was not restored, except for Northern Transylvania from Hungary.

In the aftermath of World War I, Romania, which fought alongside the Entente powers against the Central Powers, had greatly expanded its territory, incorporating the regions of Transylvania, Bessarabia and Bukovina, largely as a result of the vacuum created by the collapse of the Austro-Hungarian and Russian empires. This led to the achievement of the long-standing nationalist goal of creating a "Greater Romania", a national state that would incorporate all ethnic Romanians. However, the newly gained territories also included significant Hungarian, German, Bulgarian, Ukrainian, and Russian minorities, which put Romania at odds with several of her neighbours. This occasionally led to violent conflicts, as exemplified by the Hungarian–Romanian War and the Tatarbunary Uprising. To contain Hungarian irredentism, Romania, Yugoslavia and Czechoslovakia established the Little Entente in 1921. That same year Romania and Poland concluded a defensive alliance against the emergent Soviet Union, and in 1934 the Balkan Entente was formed with Yugoslavia, Greece and Turkey, which were suspicious of Bulgaria.

Since the late 19th century onwards Romania had been a relatively democratic constitutional monarchy with a pro-Western outlook, but the country faced increasing turmoil in the 1930s as a result of the Great Depression in Romania and the rise of fascist movements such as the Iron Guard, which advocated revolutionary terrorism against the state. Under the pretext of stabilizing the country, the increasingly autocratic King Carol II proclaimed a 'royal dictatorship' in 1938. The new regime featured corporatist policies that often resembled those of Fascist Italy and Nazi Germany. In parallel with these internal developments, economic pressures and a weak Franco-British response to Hitler's aggressive foreign policy caused Romania to start drifting away from the Western Allies and closer to the Axis.

On 13 April 1939, France and the United Kingdom had pledged to guarantee the independence of the Kingdom of Romania. Negotiations with the Soviet Union concerning a similar guarantee collapsed when Romania refused to allow the Red Army to cross its frontiers.

On 23 August 1939, Germany and the Soviet Union signed the Molotov–Ribbentrop Pact. Among other things, this recognized in a secret annex the Soviet "interest" in Bessarabia (which had been ruled by the Russian Empire from 1812 to 1918). This Soviet interest was combined with a clear indication that there was an explicit lack of any German interest in the area.

Eight days later Nazi Germany invaded the Second Polish Republic. Expecting military aid from Britain and France, Poland chose not to execute its alliance with Romania in order to be able to use the Romanian Bridgehead. Romania officially remained neutral and, under pressure from the Soviet Union and Germany, interned the fleeing Polish government after its members had crossed the Polish–Romanian border on 17 September, forcing them to relegate their authority to what became the Polish government-in-exile. After the assassination of Romanian Prime Minister Armand Călinescu on 21 September, King Carol II tried to maintain neutrality for several months longer, but the surrender of the Third French Republic and the retreat of British forces from continental Europe rendered the assurances that both countries had made to Romania meaningless.