According to The Oxford Companion to American Military History from Encyclopedia.com, World War I was instigated by the actions of Germany and Austria-Hungary following the assassination of Archduke Ferdinand of Austria-Hungary on June 28, 1914. Following that event, the German Kaiser encouraged Austria-Hungary to take action against Serbia.
The crisis was prone to escalate due to the great powers increasing military strength and dividing into the Triple Alliance and the Triple Entente during the years prior to World War I. Once Germany issued a blank check to Austria-Hungary on July 5, 1914, the first step in escalating the crisis was taken. By the end of July, Berlin was in the best position to deescalate but failed to do so.