In 1905, the Norwegian government declared the Union dissolved. In a popular plebiscite the Norwegian people expressed their preference for a constitutional monarchy, and the Storting unanimously elected a Danish prince, Prince Carl, who as Haakon VII became King of Norway.

In the years following 1905, Norway developed from a mainly agricultural society into an industrial one, partly financed by foreign capital.

In spite of infringements from both Great Britain and Germany, Norway succeeded in its policy of neutrality during the First World War. After the war, Norway gained sovereignty over Svalbard (1925). Somewhat later, Norway also took over Jan Mayen in the Arctic, and Peter I Island and Bouvet Island in the Antarctic.