World War I radically altered the diplomatic and political situations in Eurasia and Africa with the defeat of the Central Powers, including Austria-Hungary, Germany, and the Ottoman Empire; and the 1917 Bolshevik seizure of power in Russia. Meanwhile the success of the Allied Entente powers including the United Kingdom, France, the United States, Italy, Serbia, and Romania and the creation of new states from the collapse of Austria-Hungary and the Russian Empire resulted in a major shift in the balance of power from central and eastern Europe to the Atlantic littoral. In the aftermath of the war major unrest in Europe rose, especially irredentist and revanchist nationalism and class conflict. Irredentism and revanchism were strong in Germany because she was forced to accept significant territorial, colonial, and financial losses as part of the Treaty of Versailles. Under the treaty Germany lost around 13 percent of its home territory and all of its overseas colonies, while German annexation of other states was prohibited, massive reparations were imposed and limits were placed on the size and capability of Germany's armed forces. Meanwhile, the Russian Civil War had led to the creation of the Soviet Union. After Lenin's death in 1924, Stalin seized power in the USSR and repudiated the New Economic Policy favouring the Five Year Plans instead.
In the interwar period, domestic civil conflict occurred in Germany involving nationalists and reactionaries versus communists and moderate democratic political parties. A similar scenario occurred in Italy. Although Italy as an Entente ally made some territorial gains, Italian nationalists were angered that the terms of the Treaty of London upon which Italy had agreed to wage war on the Central Powers, were not fulfilled with the peace settlement. From 1922 to 1925, the Italian Fascist movement led by Benito Mussolini seized power in Italy with a nationalist, totalitarian, and class collaborationist agenda that abolished representative democracy, repressed political forces supporting class conflict or liberalism, and pursued an aggressive foreign policy aimed at forcefully forging Italy as a world power, and promising to create a "New Roman Empire." In Germany, the Nazi Party led by Adolf Hitler pursued establishing such a fascist government in Germany. With the onset of the Great Depression, Nazi support rose and, in 1933, Hitler was appointed Chancellor of Germany, and in the aftermath of the Reichstag fire, Hitler created a totalitarian single-party state led by the Nazis.
The Kuomintang (KMT) party in China launched a unification campaign against regional warlords and nominally unified China in the mid-1920s, but was soon embroiled in a civil war against its former Chinese communist allies. In 1931, an increasingly militaristic Japanese Empire, which had long sought influence in China as the first step of its right to rule Asia, used the Mukden Incident as justification to invade Manchuria and established the puppet state of Manchukuo. Too weak to resist Japan, China appealed to the League of Nations for help. Japan withdrew from the League of Nations after being condemned for its incursion into Manchuria. The two nations then fought several minor conflicts, in Shanghai, Rehe and Hebei, until signing the Tanggu Truce in 1933. Thereafter, Chinese volunteer forces continued the resistance to Japanese aggression in Manchuria, and Chahar and Suiyuan.
Adolf Hitler, after an unsuccessful attempt to overthrow the German government in 1923, became the Chancellor of Germany in 1933. He abolished democracy, espousing a radical, racially motivated revision of the world order, and soon began a massive rearmament campaign. Meanwhile, France, to secure its alliance, allowed Italy a free hand in Ethiopia, which Italy desired as a colonial possession. The situation was aggravated in early 1935 when the Saarland was legally reunited with Germany and Hitler repudiated the Treaty of Versailles, speeding up his rearmament programme and introducing conscription.
Hoping to contain Germany, the United Kingdom, France and Italy formed the Stresa Front. The Soviet Union, concerned due to Germany's goals of capturing vast areas of eastern Europe, wrote a treaty of mutual assistance with France. Before taking effect though, the Franco-Soviet pact was required to go through the bureaucracy of the League of Nations, which rendered it essentially toothless. However, in June 1935, the United Kingdom made an independent naval agreement with Germany, easing prior restrictions. The United States, concerned with events in Europe and Asia, passed the Neutrality Act in August. In October, Italy invaded Ethiopia, with Germany the only major European nation supporting the invasion. Italy then revoked objections to Germany's goal of absorbing Austria.
Hitler defied the Versailles and Locarno treaties by remilitarizing the Rhineland in March 1936. He received little response from other European powers. When the Spanish Civil War broke out in July, Hitler and Mussolini supported fascist Generalissimo Francisco Franco's nationalist forces in his civil war against the Soviet-supported Spanish Republic. Both sides used the conflict to test new weapons and methods of warfare, and the nationalists won the war in early 1939. Mounting tensions led to several efforts to strengthen or consolidate power. In October 1936, Germany and Italy formed the Rome-Berlin Axis. A month later, Germany and Japan signed the Anti-Comintern Pact, which Italy would join in the following year. In China, after the Xian Incident the Kuomintang and communist forces agreed on a ceasefire in order to present a united front to oppose Japan.