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This state of affairs continued until May 1999 when Scotland's Parliament was established following a referendum. Whereas the old Scottish Parliament had functioned as the full parliament of a sovereign state, the new parliament governs the country only on domestic matters, the United Kingdom Parliament having retained responsibility for Scotland's defence, international relations and certain other areas.

HM Queen Elizabeth II, head of state of the United Kingdom, is descended from King James VI of Scotland, the first Scottish monarch to also be King of England (James I of England from 1603). While some controversy has simmered amongst the Scottish public over her official title since her coronation (many believe that, being the first Queen Elizabeth of Scotland, she should use the style "Elizabeth I"), the courts of Scotland have confirmed "Elizabeth II" as her official title. She has said that in the future monarchs will follow the international ordinal tradition that, where a monarch reigns in a number of non-independent territories (or independent territories that agree to share a monarch) that each have a differing number of previous monarchs of the same name, the highest ordinal used in any of the territories is the one used across all.

The Church of Scotland (often referred to as The Kirk) functions as the national church. It differs from the Church of England in that it has a Presbyterian form of church governance, not subject to state control. This goes back to the Scottish experience of reformation, initiated in 1560 by John Knox. The Scottish Reformation in essence took place at a grassroots level, and the Scots chose Presbyterianism as their method of church government. This differs from the situation in England, where Henry the Eighth personally unleashed the English Reformation and chose the Episcopal system that survives to this day in the Church of England.

During the 16th century, Scotland became embroiled in the throes of the Protestant Reformation. John Knox stood out as the primary figure in this battle. A disciple of John Calvin, Knox, waged fierce battles with the forces of Catholic orthodoxy and eventually converted the country to Presbyterianism. Only the most distant parts of the Highlands retained a taste for older forms. Presbyterianism first gained a foothold in 1556 but it didn't really get going until John Knox's firebrand oratory started stirring people up, most notably in Perth, when he roused the townsfolk so much that a mob scoured the countryside for Catholics after one of his sermons, destroying the old abbey at Scone in the process. Within a few years Parliament had legislated for a National Presbyterian church, the Catholic Queen had fled, Scotland had Protestant England rather than Catholic France as its main ally, and firm Presbyterian tutors were in charge of the upbringing of the infant King.

The largest political party operating in Scotland is the Labour Party. They replaced the Liberals as Scotland's main political force in the early twentieth century and traditionally represent the interests of workers and trade-unionists. They currently operate as the senior partners in a coalition Scottish Executive.

The Scottish National Party (SNP) was formed in the 1930s with the aim of achieving Scottish independence. They are broadly on the left-of-centre and are in the European Social-Democratic mould. They are currently the second most popular party electorally, although their highpoint appears to have been in the 1970s.

During the 1920s and 1930s, as ship-building and other industrial pursuits came to be more profitable outwith the British Isles, Glasgow and Clydebank slowly decayed and fell into economic depression.

Tied as it was to the health of the British Empire, Scotland suffered after the First World War as it had gained beforehand. In the Highlands, which, for cultural reasons, had provided a disproportionate number of recruits for the British army, a whole generation of young men were lost, and many villages and communities suffered greatly. In the Lowlands, particularly Glasgow, the terrible working and living conditions for the industrial workers, many of whom did not agree with the motives of the war, led to industrial and political unrest. John MacLean became a key political figure in Red Clydeside and on Bloody Friday January 31st 1919, the British Government was so fearful of a revolutionary uprising in Glasgow that tanks and soldiers were stationed in George Square.