When Mussolini took power in Italy he turned with renewed interest to Albania. Italy began penetration of Albania's economy in 1925, when Albania agreed to allow it to exploit its mineral resources. That was followed by the First Treaty of Tirana in 1926 and the Second Treaty of Tirana in 1927, whereby Italy and Albania entered into a defensive alliance. The Albanian government and economy were subsidised by Italian loans, the Albanian army was trained by Italian military instructors, and Italian colonial settlement was encouraged. Despite strong Italian influence, Zog refused to completely give in to Italian pressure. In 1931 he openly stood up to the Italians, refusing to renew the 1926 Treaty of Tirana. After Albania signed trade agreements with Yugoslavia and Greece in 1934, Mussolini made a failed attempt to intimidate the Albanians by sending a fleet of warships to Albania.
As Nazi Germany annexed Austria and moved against Czechoslovakia, Italy saw itself becoming a second-rate member of the Axis. The imminent birth of an Albanian royal child meanwhile threatened to give Zog a lasting dynasty. After Hitler invaded Czechoslovakia (March 15, 1939) without notifying Mussolini in advance, the Italian dictator decided to proceed with his own annexation of Albania. Italy's King Victor Emmanuel III criticized the plan to take Albania as an unnecessary risk. Rome, however, delivered Tirana an ultimatum on March 25, 1939, demanding that it accede to Italy's occupation of Albania. Zog refused to accept money in exchange for countenancing a full Italian takeover and colonization of Albania.
Unwilling to become an Italian puppet, King Zog, his wife, Queen Geraldine Apponyi, and their infant son Leka fled to Greece and eventually to London. On April 12, the Albanian parliament voted to depose Zog and unite the nation with Italy "in personal union" by offering the Albanian crown to Victor Emmanuel III. The parliament elected Albania's largest landowner, Shefqet Bej Verlaci, as Prime Minister. Verlaci additionally served as head of state for five days until Victor Emmanuel III formally accepted the Albanian crown in a ceremony at the Quirinale palace in Rome. Victor Emmanuel III appointed Francesco Jacomoni di San Savino, a former ambassador to Albania, to represent him in Albania as "Lieutenant-General of the King" (effectively a viceroy).
On April 15, 1939, Albania withdrew from the League of Nations, from which Italy had resigned in 1937. On June 3, 1939, the Albanian foreign ministry was merged into the Italian foreign ministry, and the Albanian Foreign Minister, Xhemil Bej Dino, was given the rank of an Italian ambassador. Upon the capture of Albania, Italian dictator Benito Mussolini declared the official creation of the Italian Empire in which the figurehead King Victor Emmanuel III was crowned King of Albania which added to his other title as Emperor of Ethiopia (Ethiopia being occupied three years prior). The Albanian military was placed under Italian command and formally merged into the Italian Army in 1940. Additionally, the Italian Blackshirts formed four legions of Albanian Militia, initially recruited from Italians living in Albania, but later from ethnic Albanians. Albania followed Italy into war with Britain and France on June 10, 1940. Albania served as the base for the Italian invasion of Greece in October 1940, and Albanian troops participated in the Greek campaign, but they massively deserted the frontline. The country's southern areas were temporarily occupied by the Greek army during that campaign, but Italy emerged victorious after the German campaign in the Balkans of April 1941. Albania was enlarged in May 1941 by the annexation of Kosovo and parts of Montenegro and the Vardar Banovina, going a long way towards realizing "Greater Albania". However, the area of Greek Epirus called Chameria (because of the Albanian minority living there), although claimed by the Albanians, was not annexed, but merely put under an Albanian High Commissioner, who exercised only nominal control over it. When Italy left the Axis in September 1943, German troops immediately occupied Albania after a short campaign, with relatively strong resistance.
During the Second World War, the Albanian Partisans, including some sporadic Albanian nationalist groups, fought against the Italians (after the autumn of 1942) and subsequently the Germans. By October 1944 the Germans had withdrawn from the southern Balkans in response to military defeats by the Red Army, the collapse of Romania and the imminent fall of Bulgaria. After the Germans left due to the rapid Communist forces advance, with weapons captured from the Italians and the Germans, and some weapons supplied by the West, the Albanian Partisans crushed nationalist resistance and the leader of the Albanian Communist Party, Enver Hoxha, became the leader of the country.