When the war ended in 1918 Röhm joined the Freikorps, one of many private militias formed in Munich to combat communist insurrection. In 1920 he became a member of the National Socialist German Workers Party (the "Nazi" party) and helped organize the Sturmabteilung (SA). After the failed Munich Beer Hall Putsch in 1923 Röhm was dishonorably discharged from the Reichswehr and spent fifteen months in prison, where he strengthened his friendship with Adolf Hitler.
After Röhm was released in 1924 he worked with Hitler to rebuild the Nazi party, but differences arose between them. In April 1924 Röhm helped to create the Frontbann as a legal alternative to the then-outlawed SA. He then served in the Reichstag as a member of the renamed National Socialist Freedom Party before resigning in 1925. Röhm then went to Bolivia and served as a military adviser.
Many writers have suggested Röhm and his deputy Edmund Heines allowed or encouraged the promotion of many individuals into SA leadership as a result of liaisons with both themselves and other powerful SA figures (for example, Karl Ernst had been a bouncer at a gay nightclub) in spite of anti-gay Nazi policies which included the strengthening of Paragraph 175 (criminalising homosexual acts) of the German Criminal Code of 1871.
By this time, Röhm and Hitler were so close that they addressed each other as du, the German familiar form of "you." The only other members of the party who called Hitler du were Göring and Goebbels. Röhm was the only member of the party who addressed Hitler as "Adolf," rather than "my Führer."
Hitler swiftly reassured the German business community that there would be no "second revolution," which opened a breach between him and the SA. Many storm troopers were anti-capitalist members of the working class and viewed their street fighting on behalf of the Nazis as a socialist revolution. Hitler thought of the storm troopers as a political weapon no longer needed after the Nazis had taken control of the German government. Röhm however continued to believe the SA was Hitler's "revolutionary" army and showed contempt for the Prussian military leadership. Hitler had gained power with the army's support, and knew that the top army leaders cared little for Röhm. He was keenly aware his control of the German government depended on the army's continued backing. Moreover Hitler could only succeed the ailing 86-year-old Paul von Hindenburg as president and commander-in-chief if he had the army's support.
In 1934 it became clear Hindenburg was close to death and many factions in Germany positioned their favorite candidates as von Hindenburg's successor. According to William Shirer, a group of conservatives which included many influential individuals in the armed forces sought the return from exile of Crown Prince Wilhelm (son of Kaiser Wilhelm II), either as president or head of a re-established German monarchy. Meanwhile Germany's military leadership was incensed by Röhm's February 1934 proposal that the Reichswehr (German army) be merged with the SA to form a true "people's army," in which the former SA would be dominant. The army viewed the SA as a brawling mob of undisciplined street fighters and tales of homosexuality along with "corrupt morals" were rampant in the military. The officer corps unanimously rejected Röhm's proposal, insisting German military honor and discipline would vanish if Röhm's brawling storm troopers gained control of the armed forces. Fest, Joachi , Hitler (1974) pp.454-55.
On April 11 Hitler met with German military leaders on board the pocket battleship Deutschland while reviewing spring maneuvers in East Prussia. Along with defense minister Werner von Blomberg Hitler met with army commander-in-chief Werner von Fritsch and admiral Erich Raeder, who led the navy. Hitler informed them of Hindenburg's declining health and proposed the Reichswehr support Hitler as the next president. In exchange Hitler offered to reduce the SA, suppress Röhm's ambitions and guarantee the Reichswehr would become Germany's only military force. Shirer asserts Hitler also seduced military leaders with further promises to expand both the army and navy.
Meanwhile the conservative industrialists who had supported Hitler's rise to the chancellorship in 1933 were uneasy with the very public socialist leanings of both Röhm and the Strasser brothers. The conservatives and the officer corps repeatedly expressed their anti-SA opinions directly to president von Hindenburg, with whom they were closely allied both politically and socially. In early June 1934, von Hindenburg, through Blomberg, issued an ultimatum to Hitler--unless political tension in Germany ended, the ailing Hindenburg would likely declare martial law. Hitler was shocked to hear this from Blomberg, who up to that point had displayed a near lackey-like attitude around him. However, when Hitler went to see the president himself, von Hindenburg confirmed the ultimatum. Knowing such a step could forever deprive him of power, Hitler decided to carry through on his pact with the Reichswehr to suppress the SA and end its plans for a "second revolution", leading to a showdown with Röhm. In Hitler's view the army and the SA constituted the only remaining still independent power factors whose self-assurance had not been shattered.
Röhm was briefly held without trial at Stadelheim Prison in Munich in cell 70. Hitler was uneasy authorizing his execution and as a last act of compassion, ensured he had an opportunity to commit suicide first. Fest, Hitler (1974), p. 467. On July 2 he was visited by SS-Brigadeführer Theodor Eicke (then Kommandant of Dachau) and SS-Hauptsturmführer Michael Lippert, who laid a pistol on Röhm's table and told him he had ten minutes to use it. When Röhm refused to commit suicide, Lippert shot Röhm at point-blank range. Röhm was standing in the middle of the cell, his shirt histrionically opened showing his chest. The purge of the SA was legalized the next day by a decree in the Law Regarding Measures of State Self-Defense. John Toland noted that Hitler, while disapproving, had long been privately aware Röhm was homosexual but Nazi propaganda accounts of the purge made use of Röhm's sexual orientation as a justification of his execution. Ernst Röhm was buried in the Westfriedhof (Western Cemetery) in Munich.