The Lateran Treaty, signed on February 11, established a crucial legal framework for the relationship between the Holy See and Italy. The treaty emerged from negotiations that sought to resolve the conflicts stemming from the annexation of the Papal States by the Kingdom of Italy in 1870. This annexation had left the Pope without temporal power, leading to a complex political situation characterized by the Popes' refusal to recognize the Italian state. The agreement was intended to restore the Pope's sovereignty while officially recognizing the state of Italy. The ratification on June 7, 1929, finalized the terms, establishing Vatican City as an independent, sovereign entity under the authority of the Pope. This event drastically changed the political landscape for the Catholic Church and reinforced its religious authority. Vatican City's establishment included an area of approximately 44 hectares within Rome, making it the smallest internationally recognized independent state in the world.

The treaty also provided for financial compensation to the Holy See for the loss of the Papal States, along with guaranteeing the Church's rights and privileges in Italy. The agreement further established the Catholic Church's role in Italian national life, ensuring that the Church would remain an influential entity in both spiritual and temporal matters within the country. The Lateran Treaty was significant not only for establishing Vatican City but also for pivoting the Catholic Church back into a position of prominence and influence on the international stage.