The unrest in Hungary in 1848 and 1849 was largely an expression of Magyar nationalism, and as such was opposed by those from minority ethnic groups, in particular the Croats. In 1849, with Louis Kossuth appointed president of an independent republic of Hungary, the Austrians accepted Russian assistance, offered in the spirit of the Holy Alliance, and the rebels were eventually crushed at the Battle of Timisoara.

Austria was by this time largely under the control of Foreign Minister Metternich, who used his influence to persuade the other major European powers to assist Austria in crushing revolts in Spain, Naples and Piedmont. His own methods involved the limited use of secret police and the partial censorship of universities and freemasons. The years 1848 and 1849 saw a succession of largely unsuccessful uprisings against the absolutist rule of the Habsburg monarchy. Although reforms of the legal and administrative systems (known as the "April Laws") were set to take effect in Hungary later that year, they did not apply to the rest of the Habsburg territories. The unrest started in Vienna in March 1848 (as a result of which Metternich was dismissed) and spread to Prague, Venice and Milan. A Constituent Assembly was summoned to revise the constitution, but its only lasting action was to abolish serfdom. By the autumn the unrest had reached Hungary as a number of ethnic groups within the empire made bids for greater national rights and freedoms. In December the ineffectual Ferdinand I abdicated in favour of his nephew, Francis Joseph. Not feeling bound by the April Laws, Francis Joseph annulled the Hungarian constitution, causing the Hungarian leader Louis Kossuth to declare a republic. With the help of the Russians (who feared the spread of revolutionary fervour), and the Serbs, Croats and Romanians (who all feared Hungarian domination), the Austrian army succeeded in crushing the revolt in 1849.

From 1849 onwards an even more strongly centralized system of government was established. Trade and commerce were encouraged by fiscal reforms, and the railway network expanded. Coupled with peasant emancipation - for which landowners had been partially compensated by the government - these measures led to a trebling of the national debt over ten years. Higher taxes and a national loan raised from wealthier citizens led to discontent among the Hungarian nobles, who wished to see the restoration of the April Laws. In 1859 war in the Italian provinces forced the Austrians to cede Lombardy.