Settled in ancient times, the central European land that is now Austria was occupied in pre-Roman times by various Celtic tribes. The Celtic kingdom of Noricum was later claimed by the Roman Empire and made a province. After the fall of the Roman Empire, the area was invaded by Bavarians, Slavs and Avars. The Slavic tribe of the Carantanians migrated into the Alps, and established the realm of Carantania, which covered much of eastern and central Austrian territory. Charlemagne conquered the area in 788 AD, encouraged colonisation, and introduced Christianity. As part of Eastern Francia, the core areas that now encompass Austria were bequeathed to the house of Babenberg. The area was known as the marchia Orientalis and was given to Leopold of Babenberg in 976.

Coats of arms of the Habsburg Emperor in 1605The first record showing the name Austria is from 996 where it is written as Ostarrîchi, referring to the territory of the Babenberg March. In 1156 the Privilegium Minus elevated Austria to the status of a duchy. In 1192, the Babenbergs also acquired the Duchy of Styria. With the death of Frederick II in 1246, the line of the Babenbergs went extinct. As a result, Otakar II of Bohemia effectively assumed control of the duchies of Austria, Styria and Carinthia.[20] His reign came to an end with his defeat at Dürnkrut at the hands of Rudolf I of Germany in 1278. Thereafter, until World War I, Austria's history was largely that of its ruling dynasty, the Habsburgs.

In the 14th and 15th centuries, the Habsburgs began to accumulate other provinces in the vicinity of the Duchy of Austria. In 1438, Duke Albert V of Austria was chosen as the successor to his father-in-law, Emperor Sigismund. Although Albert himself only reigned for a year, from then on, every emperor of the Holy Roman Empire was a Habsburg, with only one exception.

The Habsburgs began also to accumulate lands far from the Hereditary Lands. In 1477, Archduke Maximilian, only son of Emperor Frederick III, married the heiress Maria of Burgundy, thus acquiring most of the Netherlands for the family. His son Philip the Fair married the heiress of Castile and Aragon, and thus acquired Spain and its Italian, African, and New World appendages for the Habsburgs. In 1526, following the Battle of Mohács, Bohemia and the part of Hungary not occupied by the Ottomans came under Austrian rule. Ottoman expansion into Hungary led to frequent conflicts between the two empires, particularly evident in the so-called Long War of 1593 to 1606.

Battle of Vienna in 1683 broke the advance of the Ottoman Empire into EuropeDuring the long reign of Leopold I (1657–1705) and following the successful defense of Vienna in 1683 (under the command of the King of Poland, John III Sobieski), a series of campaigns resulted in bringing all of Hungary to Austrian control by the Treaty of Carlowitz in 1699. Emperor Charles VI relinquished many of the fairly impressive gains the empire made in the previous years, largely due to his apprehensions at the imminent extinction of the House of Habsburg. Charles was willing to offer concrete advantages in territory and authority in exchange for other powers' worthless recognitions of the Pragmatic Sanction that made his daughter Maria Theresa his heir. With the rise of Prussia the Austrian–Prussian dualism began in Germany. Austria participated, together with Prussia and Russia, in the first and the third of the three Partitions of Poland (in 1772 and 1795).

The Congress of Vienna by Jean-Baptiste Isabey, 1819.Austria later became engaged in a war with Revolutionary France—at the beginning highly unsuccessful—with successive defeats at the hands of Napoleon meaning the end of the old Holy Roman Empire in 1806. Two years earlier, in 1804, the Empire of Austria was founded. In 1814 Austria was part of the Allied forces that invaded France and brought to an end the Napoleonic wars. It thus emerged from the Congress of Vienna in 1815 as one of four of the continent's dominant powers and a recognised great power. The same year, the German Confederation, (Deutscher Bund) was founded under the presidency of Austria. Because of unsolved social, political and national conflicts the German lands were shaken by the 1848 revolution aiming to create a unified Germany. A unified Germany would have been possible either as a Greater Germany, or a Greater Austria or just the German Confederation without Austria at all. As Austria was not willing to relinquish its German-speaking territories to what would become the German Empire of 1848 the crown of the new formed empire was offered to the Prussian King Friedrich Wilhelm IV. In 1864 Austria and Prussia fought together against Denmark, and successfully freed the independent duchies of Schleswig and Holstein. Nevertheless as they could not agree on a solution to the administration of the two duchies, they fought in 1866 the Austro-Prussian War. Defeated by Prussia in the Battle of Königgrätz, Austria had to leave the German Confederation and subsequently no longer took part in German politics.

Archduke Franz Ferdinand (right) with his familyThe Austro-Hungarian Compromise of 1867, the Ausgleich, provided for a dual sovereignty, the Austrian Empire and the Kingdom of Hungary, under Franz Joseph I. The Austrian-Hungarian rule of this diverse empire included various Slav groups such as Poles, Ukrainians, Czechs, Slovaks, Slovenes, Serbs and Croats, as well as large Italian and Romanian communities.

As a result, ruling Austria–Hungary became increasingly difficult in an age of emerging nationalist movements. Yet the government of Austria tried its best to be accommodating in some respects: The Reichsgesetzblatt, publishing the laws and ordinances of Cisleithania, was issued in eight languages, all national groups were entitled to schools in their own language and to the use of their mothertongue at state offices, for example. The government of Hungary to the contrary tried to magyarise other ethnic entities. Thus the wishes of ethnic groups dwelling in both parts of the dual monarchy hardly could be solved.

The assassination of Archduke Franz Ferdinand in Sarajevo in 1914 by Gavrilo Princip (a member of the Serbian nationalist group the Black Hand) was used by leading Austrian and Hungarian politicians and generals to persuade the Emperor to declare war on Serbia, thereby risking and prompting the outbreak of World War I which led to the dissolution of the Austro-Hungarian Empire.

On October 21, 1918, the elected German members of the Reichsrat (parliament of Imperial Austria) met in Vienna as the Provisional National Assembly for German Austria (Provisorische Nationalversammlung für Deutschösterreich). On October 30 the assembly founded the State of German Austria by appointing a government, called Staatsrat. This new government was invited by the Emperor to take part in the decision on the planned armistice with Italy, but refrained from this business, leaving the responsibility for the end of the war on November 3, 1918 solely to the Emperor and his government. On November 11 the Emperor, counseled by ministers of the old and the new government, declared not to take part in state business any more; on November 12 German Austria, by law, declared to be a democratic republic and part of the new German republic. The constitution, renaming Staatsrat to Bundesregierung (federal government) and Nationalversammlung to Nationalrat (national council) was passed on 10 November 1920.

Ethno-linguistic map of Austria–Hungary, 1910The Treaty of Saint-Germain of 1919 (for Hungary the Treaty of Trianon of 1920) confirmed and consolidated the new order of Central Europe which to a great part had been established in November 1918, creating new states and resizing others. However, over 3 million German Austrians found themselves living outside of the newborn Austrian Republic in the respective states of Czechoslovakia, Yugoslavia, Hungary and Italy.[32] Between 1918 and 1919, Austria was officially known as the State of German Austria (Staat Deutschösterreich). Not only did the Entente powers forbid German Austria to unite with Germany, they also ignored the name German Austria in the peace treaty to be signed; it was therefore changed to Republic of Austria in late 1919.