The nascent Kingdom of Italy invaded and occupied Romagna (the eastern portion of the Papal States) in 1860, leaving only Lazio (Latium) in the pope's domains.

[7]Under the terms of the Law of Guarantees of 1871, the Italian government offered to Pius IX and his successors the use of, but not sovereignty over, the Vatican and Lateran Palaces and a yearly income of  3,250,000 Lire.

Negotiations for the settlement of the Roman question began in 1926 between the Holy See and the Italian fascist government led by Prime Minister Benito Mussolini, and culminated in the agreements of the Lateran Pacts, signed—the Treaty says—for King Victor Emmanuel III by Mussolini and for Pope Pius XI by Cardinal Secretary of State Pietro Gasparri,[8] on 11 February 1929.

[10] The agreements included a political treaty which created the state of the Vatican City and guaranteed full and independent sovereignty to the Holy See.

To commemorate the successful conclusion of the negotiations, Mussolini commissioned the Via della Conciliazione ("Road of the Conciliation"), which would symbolically link the Vatican City to the heart of Rome.

"[12] The exclusive state financial support for the Church was also ended, and replaced by financing through a dedicated personal income tax called the otto per mille, to which other religious groups, Christian and non-Christian, also have access.

[16] In 2008, it was announced that the Vatican would no longer immediately adopt all Italian laws, citing conflict over right-to-life issues following the trial and ruling of the Eluana Englaro case.