In 1887 the Dodecanese islands were in the process of being assimilated into the unified administrative system of the Ottoman state, which meant the abolition of their privileges and self-government. A similar situation had faced other islands, ever since 1869.

The abolition of privileges met with strong resistance on the part of the inhabitants. This was particularly intense in Symi and Kalymnos, and resulted in a restricted participation in the administration. Equally strong and uncompromising was the resistance in 1908-11 against the measures of the Young Turks, who tried to complete the process of abolishing the final privileges, to impose new taxes and to make the Turkish language and conscription compulsory.

The Greek population of the islands was superior in numbers to the small Muslim minority, which was mostly settled in Rhodes and Kos, as well as to the small minority of Jews and Europeans in Rhodes. There were many Greek islanders who emigrated to Greece and Egypt, where they created prosperous mercantile communities (paroikies), which later contributed to the development of the islands in the form of donations and other types of patronage. The inhabitants of the Dodecanese were particularly active in commerce. Sponge-fishing developed in Kalymnos, Symi and Chalki. Education also developed, thanks to the activity of the Church, the Greeks abroad and the inhabitants themselves, with the result that many and remarkable schools were established in the islands.

During the Greco-Italian war that broke out in 1911, in which the Italians wished to capture Tripolis and Cyrene, the capture of the Dodecanese was established by the Italians as a strategy to check the supply of the Turks. Astypalaia was the first island to be captured in April 1912. At the end of that same month Rhodes was captured and the other islands followed suit.
Castelorizo was not captured at that point by the Italians, but followed a different fate. In 1913 a Greek landing took place in the island, without Venizelos' knowledge, which resulted in the removal of the Turkish garrison and administration. Venizelos demanded the withdrawal of the Greek force and the notables in charge of administration. A raid against the island by Turko-cretans from the coast of Asia Minor compelled Greece to dispatch a naval squadron from the Ionian Sea to protect the inhabitants. A Greek governor then settled in the island until 1915, when it was captured by the French, who kept it until 1921, when it was surrendered to the Italians.

The Italian occupation was presented to the inhabitants as a temporary measure in the context of the Italo-Turkish war. The occupation was agreed upon after the Treaty of Ouchy in Switzerland in 1912, and thus gained official status on the eve of the First World War. In the secret negotiations of between the Entente and Italy (in order for the latter to enter the war on the side of the Entente), the Italian occupation of the island was a means of exerting pressure during negotiations (Secret Treaty of London, 1915).

The Memorandum of Venizelos on 17/30 December 1918 included a clause relating to the Dodecanese islands. The Italians were opposed, but Venizelos curbed their objections and the 5th article of the Venizelos-Tittoni Agreement (29 July 1919) ceded the islands to Greece with the exclusion of Rhodes, which acquired autonomy. The agreement was ratified by the Paris Peace Conference in 1920. Italy tried to go back on the issue of the Dodecanese, referring to Greek presence in Asia Minor, but under pressure from the other Great Powers she once again ceded the Dodecanese to Greece with a separate Greco-Italian treaty signed along with the Treaty of Sevres. After the Asia Minor Catastrophe and the imposition of fascism in Italy the tide turned once more. In September 1922 Mussolini's Italy condemned the agreement, but with the Treaty of Lausanne Greece's rule over the Dodecanese was internationally recognized.

This was the first period of Italian occupation of the Dodecanese (1912-23). The second and harsher followed from 1923 to 1943. The final incorporation of the Dodecanese into the Greek state occurred as late as 1947.