King Nicholas I had ruled the country as prince since 1860, and had initiated several modernising reforms at the beginning of the 20th century, such as introducing a constitution and a new currency, the Montenegrin perper.

But the Montenegrins had to abandon the newly captured city of İşkodra (Skadar in Serbian, modern-day Shkodër) to the new state of Albania in May 1913, at the insistence of the Great Powers.

Esad Pasha made a deal to surrender the town to the Montenegrins in exchange for Montenegro supporting his claims in Central Albania.

On 26 November 1918, the Podgorica Assembly, an elected body claiming to represent the Montenegrin people, unanimously adopted a resolution deposing king Nicholas I (who was still in exile) and unifying Montenegro with Serbia.

During World War II, the occupying forces in Yugoslavia considered turning the Italian governorate of Montenegro into a puppet kingdom, but nothing came of these plans.