Through the 1850s, Napoléon III ran an authoritarian regime whose most notable achievement was a rapid growth in industrial and economic power. Foreign trade trebled, the rail system grew enormously, and the first investment banks were established. In 1858, in the aftermath of an attempt on his life by an Italian patriot, the emperor suddenly embarked on a policy of liberalization , initially of the economy, which alienated much of the business class. Reforms included the right to form trade unions and to strike, an extension of public education, lifting of censorship and the granting of ministerial "responsibility" under a government headed by the liberal opposition.

Disaster, however, was approaching in the shape of the Franco-Prussian war. Involved in a conflict with Bismarck and the rising power of Germany, Napoléon III declared war. The French army was quickly defeated and the emperor himself taken prisoner in 1870. The result at home was a universal demand for the proclamation of a third republic . The German armistice agreement insisted on the election of a national assembly to negotiate a proper peace treaty. France lost Alsace and Lorraine and was obliged to pay hefty war reparations.

Outraged by the monarchist majority re-elected to the new Assembly and by the attempt of its chief minister, Thiers, to disarm the National Guard, the people of Paris created their own municipal government known as the Commune .