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Not much is known about Finland's early history, with archaeologists still debating when and where a tribe of Finno-Ugric speakers cropped up. Roman historian Tacitus mentions a tribe primitive and savage Fenni in 100AD and even the Vikings chose not to settle, trading and plundering along the coasts.

In the mid-1150s Sweden started out to conquer and Christianize the Finnish pagans in earnest, with Birger Jarl incorporating most of the country into Sweden in 1249. Finland stayed an integral part of Sweden until the 19th century, although there was near-constant warfare with Russia on the eastern border and two brief occupations. After Sweden's final disastrous defeat in the Finnish War of 1808-1809, Finland became in 1809 an autonomous grand duchy under Russian rule.

Russian rule alternated between tolerance and repression and there was already a significant independence movement when Russia plunged into revolutionary chaos in 1917. Parliament seized the chance and declared independence in December, quickly gaining Soviet assent, but the country promptly plunged into a brief but bitter civil war between the conservative Whites and the socialist Reds, eventually won by the Whites.

During World War II, Finland was attacked by the Soviet Union in the Winter War, but fought them to a standstill that saw the USSR conquer 12% of Finnish territory. Finland then allied with Germany in an unsuccessful attempt to repel the Soviets and regain the lost territory, was defeated and, as a condition for peace, had to turn against Germany instead. Thus Finland fought three separate wars during World War II. In the end, Finland lost much of Karelia and Finland's second city Vyborg, but Soviets paid a heavy price for them with over 300,000 dead.

After the war, Finland lay in the grey zone between the Western countries and the Soviet Union. The Finno-Soviet Pact of Friendship, Cooperation and Mutual Assistance committed Finland to resist armed attacks by "Germany or its allies" (read: the West), but also allowed Finland to stay neutral in the Cold War and avoid a Communist government or Warsaw Pact membership. In politics, there was a tendency of avoiding any policies and statements that could be interpreted as anti-Soviet. This balancing act of Finlandization was humorously defined as "the art of bowing to the East without mooning the West". Despite close relations with the Soviet Union, Finland managed to retain democratic multi-party elections and remained a Western European market economy, building close ties with its Nordic neighbours. While there were some tense moments, Finland pulled it off: in the subsequent half century, the country made a remarkable transformation from a farm/forest economy to a diversified modern industrial economy featuring high-tech giants like Nokia, and per capita income is now in the top 15 of the world.

After the implosion of the USSR, Finland joined the European Union in 1995, and was the only Nordic state to join the euro system at its initiation in January 1999.