For history prior to 1948, see Karenni States.
In August 1948, the Karenni leader U Bee Htu Re was assassinated by central government militia for his opposition to include the Karenni States into the Union of Burma. An armed uprising swept the state that has continued to the present-day.
On 5 October 1951, Karenni State, under the Investigation Act, was renamed Kayah State.
In 1957, pro-independence groups already active in the area formed the Karenni National Progressive Party (KNPP), backed by its own army, the Karenni Army (KA). Apart from a brief ceasefire in 1995, the KA has been fighting ever since. Rivals to the KNPP include the leftist Kayan New Land Party (KNLP), and the Karenni National People's Liberation Front (KNPLF), both of which are now allied with the Myanmar military.
In 1996, Myanmar's State Law and Order Restoration Council (SLORC) of stepped up its campaign to crush Karenni independence with a population transfer program, forcibly moving villagers to designated relocation sites to deprive the pro-independence forces of bases of support. The Myanmar government has been accused of massive human rights violations in the region. It has been alleged that villagers live under the constant threat of rape, beatings, arbitrary arrest or execution, conscription as slave labor for the Myanmar army, and having their food and possessions taken without compensation. It has also been alleged that the relocation centers have inadequate access to water, food, medical services, and educational facilities. An estimated 50,000 Karenni people classified as IDPs (Internally Displaced Persons) and thousands more are in refugee camps in Thailand.
In 2005, although ceasefire talks continue sporadically, there have been no further developments and the fighting continues.
In 1952, the former Shan state of Mong Pai was added to the Karenni States and renamed the Kayah State.
Ethnographers classify anywhere from seven to ten ethnic groups (not including ethnic sub-groups) as native to Kayah State. In addition, Shan, Intha, and Bamar live in the north and Pa-O in surrounding hills. Each group is also known by more than one name. Clearly, ethnicity in Kayah State is a complex issue, made more complex by the current political situation. According to the 1983 census conducted by UN and the Burmese government, the Kayah composed 56.12%, while Bamar (17.58%), Shan (16.66%), Karen (6.45%), mixed races (2.08%), and other groups formed minorities. Ethnolinguists distinguish the following linguistic groups in Kayah State:
The state capital is Loikaw. The state is divided into 2 districts (Bawlake and Loikaw) which are divided into seven townships with 106 wards and villages.
Kayah State has a primarily extraction-based economy. The main crop is rice, mostly irrigated, with other important crops including millet, maize, sesame, groundnut, garlic, and vegetables. Mineral products include alabaster, tin, and tungsten. Valuable woods such as teak and pine were once produced, but the forests have largely been stripped bare by illegal logging authorized by the Tatmadaw (Burmese military). The hydroelectric power plant at Lawpita Falls outside of Loikaw is of strategic importance, as it supplies over 20% of Myanmar's total electrical power.
Kayah State has theoretical tourist potential, if the political situation is resolved. The state has rugged mountains, river streams, lakes and waterfalls; however, transport and communication are difficult. At present, Kayah State is open to outsiders by permit only, which can be difficult to obtain depending on the current military situation. Even with a permit, usually only a 25 km radius around Loikaw is allowed. The central government effectively controls only Loikaw and parts of the western half of the state.