Austria-Hungary considered the newly enlarged and Russian-backed Serbia to be the principal threat to its security because Serbian military intelligence supported anti-Habsburg groups and activities in Bosnia and Hercegovina. Thus, when the heir to the Habsburg crown, Franz Ferdinand, and his wife were assassinated in Sarajevo by Bosnian nationalists on June 28, 1914, the presumption of Serbian complicity was strong. The idea of a preemptive war against Serbia was not new in Vienna, and, despite the weak pretext, Germany indicated a willingness to back its ally.

On July 23, Austria-Hungary presented Serbia with an ultimatum designed to be rejected. The key demands were that Serbia suppress anti-Habsburg activities, organizations, and propaganda and that Habsburg officials be permitted to join in the Serbian investigation of the assassination. Serbia responded negatively but appeared conciliatory. Nonetheless, Austria-Hungary declared war on Serbia on July 28 without further consultations with Germany.

Russia's decision to mobilize on July 30 escalated the war beyond a regional conflict by bringing into play the system of European alliances. Because German war strategy depended on avoiding a two-front war, Germany had to defeat France before Russia could fully mobilize. Thus, Germany responded to Russia's mobilization by immediately declaring war on France and Russia. On August 4, Britain declared war on Germany. On August 6, Austria-Hungary declared war on Russia. Finally, on August 12, France and Britain declared war on Austria-Hungary.

Once the major powers were engaged, they sought to enlist the support of the smaller powers. Despite its partnership with Austria-Hungary and Germany in the Triple Alliance, Italy was not bound by that treaty to join the war, and it declared its neutrality. Germany pressed Austria-Hungary unsuccessfully to cede to Italy Austrian territories it desired, in order to win Italian support. Because the Triple Entente powers readily promised transfer of the territories in the event of victory, Italy entered the war on their side in April 1915.

Although German and Austro-Hungarian military victories in the east during the spring of 1915 overcame the military disasters that Austria-Hungary experienced early in the war, the empire's internal economic situation steadily grew more precarious. Austria-Hungary was not prepared for a long and costly war.

The death of Emperor Franz Joseph on November 21, 1916, deprived Austria-Hungary of his symbolic unifying presence. His twenty-nine-year-old grand-nephew Karl (r. 1916-18) was unprepared for his role as emperor. But by this time, the future of the monarchy no longer depended on what the emperor did; rather, its fate hinged on the outcome of the war. Despite revolutionary Russia's withdrawal from the war, military success in the east could not counter events in the west. The United States had entered the war on the side of the Allies in April 1917, and with the failure of its military offensive in the spring of 1918, Germany was no longer capable of continuing the war.

Data as of December 1993