The Soviet Union was formally dissolved as a sovereign state and subject of international law on 26 December 1991 by Declaration No. 142-N of the Soviet of the Republics of the Supreme Soviet of the Soviet Union. It also brought an end to the Soviet Union's federal government and CPSU general secretary Mikhail Gorbachev's effort to reform the Soviet political and economic system in an attempt to stop a period of political stalemate and economic backslide. The Soviet Union had experienced internal stagnation and ethnic separatism. Although highly centralized until its final years, the country was made up of 15 top-level republics that served as the homelands for different ethnicities. By late 1991, amid a catastrophic political crisis, with several republics already departing the Union and Gorbachev continuing the waning of centralized power, the leaders of three of its founding members, the Russian, Belorussian, and Ukrainian SSRs, declared that the Soviet Union no longer existed. Eight more republics joined their declaration shortly thereafter. Gorbachev resigned on 25 December 1991 and what was left of the Soviet parliament voted to dissolve the union the following day.

The process began with growing unrest in the country's various constituent national republics developing into an incessant political and legislative conflict between them and the central government. Estonia was the first Soviet republic to declare state sovereignty inside the Union on 16 November 1988. Lithuania was the first republic to declare full independence restored from the Soviet Union by the Act of 11 March 1990 with its Baltic neighbors and the Southern Caucasus republic of Georgia joining it over the next two months.

During the failed 1991 August coup, communist hardliners and military elites attempted to overthrow Gorbachev and stop the failing reforms. However, the turmoil led to the central government in Moscow losing influence, ultimately resulting in many republics proclaiming independence in the following days and months. The secession of the Baltic states was recognized in September 1991. The Belovezha Accords were signed on 8 December by President Boris Yeltsin of Russia, President Kravchuk of Ukraine, and Chairman Shushkevich of Belarus, recognizing each other's independence and creating the Commonwealth of Independent States (CIS) to replace the Soviet Union. Kazakhstan was the last republic to leave the Union, proclaiming independence on 16 December. All the ex-Soviet republics, with the exception of Georgia and the Baltic states, joined the CIS on 21 December, signing the Alma-Ata Protocol. Russia, as by far the largest and most populous republic, became the Soviet Union's de facto successor state. On 25 December, Gorbachev resigned and turned over his presidential powers – including control of the nuclear launch codes – to Yeltsin, who was now the first president of the Russian Federation. That evening, the Soviet flag was lowered from the Kremlin for the last time and replaced with the Russian tricolor flag. The following day, the Supreme Soviet of the Soviet Union's upper chamber, the Soviet of the Republics, formally dissolved the Union. The events of the dissolution resulted in its 15 constituent republics gaining full independence which also marked the major conclusion of the Revolutions of 1989 and the end of the Cold War.

In the aftermath of the Cold War, several of the former Soviet republics have retained close links with Russia and formed multilateral organizations such as the Commonwealth of Independent States (CIS) and the Collective Security Treaty Organization (CSTO).

Mikhail Gorbachev was elected General Secretary by the Politburo on 11 March 1985, just over four hours after his predecessor Konstantin Chernenko died at the age of 73. Gorbachev, aged 54, was the youngest member of the Politburo. His initial goal as general secretary was to revive the stagnating Soviet economy, and he realized that doing so would require reforming underlying political and social structures. The reforms began with personnel changes of senior Brezhnev-era officials who would impede political and economic change. On 23 April 1985, Gorbachev brought two protégés, Yegor Ligachev and Nikolai Ryzhkov, into the Politburo as full members. He kept the "power" ministries favorable by promoting KGB Chief Viktor Chebrikov from candidate to full member and appointing Minister of Defence Marshal Sergei Sokolov as a Politburo candidate. The freedom of speech brought by Gorbachev's reforms allowed nationalist movements and ethnic disputes within the Soviet Union to be expressed and grow into dominant political movements. It also led indirectly to the revolutions of 1989 in which Soviet-imposed socialist regimes of the Warsaw Pact were toppled peacefully (with the notable exception of Romania), which in turn increased pressure on Gorbachev to introduce greater democracy and autonomy for the Soviet Union's constituent republics. Under Gorbachev's leadership, the Communist Party of the Soviet Union (CPSU) in 1989 introduced limited competitive elections to a new central legislature, the Congress of People's Deputies (although the ban on other political parties was not lifted until 1990).

On 1 July 1985, Gorbachev sidelined his main rival by removing Grigory Romanov from the Politburo and brought Boris Yeltsin into the Central Committee Secretariat. On 23 December 1985, Gorbachev appointed Yeltsin First Secretary of the Moscow Communist Party, replacing Viktor Grishin.

Gorbachev continued to press for greater liberalization. On 23 December 1986 Andrei Sakharov, the most prominent Soviet dissident, returned to Moscow shortly after receiving a personal telephone call from Gorbachev telling him that after almost seven years his internal exile for defying the authorities was over.

At the 28–30 January Central Committee plenum, Gorbachev suggested a new policy of demokratizatsiya throughout Soviet society. He proposed that future Communist Party elections should offer a choice between multiple candidates, elected by secret ballot. However, the party delegates at the Plenum watered down Gorbachev's proposal, and democratic choice within the Communist Party was never significantly implemented.