The Karlstad Treaty marked a significant turning point in Scandinavian relations, culminating from years of discontent and political maneuvering regarding the union between Norway and Sweden. Established in 1814 following the Napoleonic Wars, the union was intended to be a cooperative arrangement that benefitted both countries. However, by the early 20th century, Norway increasingly sought independence, driven by a burgeoning national identity and dissatisfaction with Swedish dominance in political affairs. As tensions escalated, Norway moved towards a greater assertion of national interests.

Negotiations to end the union took place in Karlstad during the summer of 1905. Representatives from both Norway and Sweden worked to address grievances and plan for an amicable separation. Norwegian Prime Minister Johan Ludwig Mowinckel was instrumental in these discussions. The treaty's terms included the recognition of Norway as a fully independent state, the future arrangement of diplomatic relations, and the continuation of economic partnerships. The negotiations were characterized by a spirit of cooperation, with an emphasis on peaceful resolutions rather than conflict.

The signing of the Karlstad Treaty on September 23, 1905, officially dissolved the union. It was celebrated in Norway as a momentous occasion, while in Sweden, there was a sense of resignation. Following the treaty, both nations moved forward to establish their identities and governmental structures, contributing to the development of modern Scandinavian states. The dissolution presented an inspiring example of conflict resolution through diplomatic dialogue rather than warfare.