The Austro-Hungarian Compromise of 1867 established the dual monarchy of Austria-Hungary, which was a military and diplomatic alliance of two sovereign states. The Compromise only partially re-established the former pre-1848 sovereignty and status of the Kingdom of Hungary, being separate from, and no longer subject to, the Austrian Empire. The compromise put an end to the 18-year-long military dictatorship and absolutist rule over Hungary which Emperor Franz Joseph had instituted after the Hungarian Revolution of 1848. The territorial integrity of the Kingdom of Hungary was restored. The agreement also restored the old historic constitution of the Kingdom of Hungary.

Count Gyula Andrássy de Csíkszentkirály et Krasznahorka was a Hungarian statesman, who served as Prime Minister of Hungary (1867–1871) and subsequently as Foreign Minister of Austria-Hungary (1871–1879). Andrássy was a conservative; his foreign policies looked to expanding the Empire into Southeast Europe, preferably with British and German support, and without alienating Turkey. He saw Russia as the main adversary, because of its own expansionist policies toward Slavic and Orthodox areas. He distrusted Slavic nationalist movements as a threat to his multi-ethnic empire.