After World War I, in which the Austria-Hungarian Empire lost, Czechoslovakia (a union of modern-day Czech Republic and Slovakia) was formed in 1918. The country began falling apart in 1938 as ethnic minority groups began seeking independence. As Nazi German power rose, the Sudetenlands (in Czech Republic) were taken by the Germans without much fight as Czechoslovakia united with the Nazis to prevent further violence. Slovakia was also home to a large number of Jews at this time and the Germans killed these people, forever altering the ethnic makeup of Slovakia.
After World War II Czechoslovakia elected the communist party to power with little influence from the Soviet Union, although once elected, the communists were closely aligned with and controlled by the Soviets. Under Soviet rule, Czechoslovakia faced both industrialization and rationing, as they were forced to remain at odds with the world to the west. This pressure built until 1968 when the Czech's protested (called Prague Spring), but they were quickly put down.
In 1989 Czechoslovakia gained independence and the two regions of the Czech Republic and Slovakia decided to separate, creating a peaceful Velvet Revolution in 1993.
Since this time both the Czech Republic and Slovakia have been close allies as each has developed at different paces and in different industries. In 2004 both the Czech Republic and Slovakia joined the European Union (EU) and in 2009 Slovakia adopted the Euro.