A dual Austro-Hungarian empire, which 1867 to 1918 existed as a multinational Central European state, ruled by the Habsburg Dynasty. Besides Turkey and Germany, it was the country that had the greatest impact on the Serbian history in the last two centuries.
The border between the Austrian and the Hungarian part was the Leitha river. The Aiustrian part of the monarchy was called Cisleithania, the Hungarian part was Transleithania and the territories under the dual administration from 1878 were the vast lands of Bosnia and Herzegovina.
Territories of Croatia and Slavonia, where the majority of Serbs lived, belonged to the Hungarian part of the empire.
The Austro-Hungary came to be by an agreement between Austria and Hungary, which ensured the Hungarian equal status in the bilateral state and legal affairs.
In 1849, the Austrian empire, supported by Russia, quenched the Hungarian aspirations for independence. Seventeen years later, the German alliance lead by Austria saw a heavy military defeat from Prussia, so that the agreement with Hungary was a political necessity.
Other nations of that multinationals formation had a negative view on establishing the new state. Slavonic peoples, Serbs in particular, considered their interests disregarded. Under the Hungarian rule, Serbs lost all the erstwhile rights they used to enjoy as the frontiersmen of the Habsburg empire.
Quite aggressive Austro-Hungarian foreign policy and its immoderate aspirations towards the Balkans caused the First World War to break out. And then, Austro-Hungary was defeated in the war. It ceased to exist when several of its parts declared indepence, the Kingdom of Serbs, Croats and Slovenes, among others.