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The result of a constitutional compromise (ausgleich) between emperor franz joseph and hungary (then part of the empire), it consisted of diverse dynastic possessions and an internally autonomous kingdom of hungary.

The two halves of the empire were known as cisleithania (austrian territories) and transleithania (hungarian territories), and shared ministries controlled foreign affairs, the army, and financial matters, which allowed the empire to maintain some measure of unity across its vast territories. This multinational empire was one of the most complex and influential states of its time, balancing internal diversity with external pressures. This lasted 51 years before it was dissolved after world war i. Following hungary's defeat against the ottoman empire in the battle of mohács of 1526, the habsburg empire became more involved in the kingdom of hungary, and subsequently assumed the hungarian throne. The empire was also known as the dual monarchy because of its unique governing structure.

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