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The rulers of Khalkha gathered at a meeting during a Mandala devotion ceremony to honour Boghda Gegeen Jebzundamba Hutuhtu VIII (1870-1924) in July 1911 and carried out a decision to restore the independent Mongolian statehood in the view of the nearing collapse of the Qing Dynasty. Another decision was made in November 1911 to mobilise 1000 warriors from each of the 4 aimags of Khalkha and, on the occasion of the presence of these Khalkha troops in Urga, the Manchu amban in Urga Sando was deported back to Beijing. Mongolia became independent on the 1st of December 1911.

Boghda Gegeen was enthroned on the 29th of December 1911 as Khaan of Mongolia and the era was titled as Olana Örgugdegsen. The Manchu warlord in Uliastai was deported on the 12th of January 1912 during the presence of 700 Mongolian warriors mobilised from Sain Noyan Khan aimag. Mongolian troops led by Magsarjav and Damdinsuren arrived in Kobdo region in August 1912. After an intense storming attack supported by the local people, they liberated the city of Kobdo on the 7th of August 1912.

The Bargu people rose against the foreign domination in August 1912, occupied the city of Hailar, and announced their unification with the Boghda Khaanate of Mongolia. Also 35 of the 49 khoshuus of Inner Mongolia, the Mongols of Qinghai (Kukunor) and Xinjiang (Jungaria) announced joining the Boghda Khaanate of Mongolia.

By its significance, the establishment of the Boghda Khaanate of Mongolia is only comparable with the foundation of the unified Mongol Khaanate in 1206. With the national liberation, Mongolia woke up from the medieval darkness and stepped on to the path of modernisation. A parliamentary structure consisting of 2 chambers, the Upper Hural and the Lower Hural, was formed in 1914. A legal code "Jarlig yar toghtughaghsan Mongghol Ulus un hauli zuyil un bichig" was adopted in 1915.

An unequal Kyakhta treaty of 1915 between the Czarist Russia, Mongolia and the Republic of China reduced the independence achieved by the Mongolian people to an autonomy within China. The Mongolian government held a position of preserving Mongolia's independence including Khalkha Mongolia, Kobdo region, Inner Mongolia, Bargu and Kukunor. The position of China was to subjugate all of Mongolia as internal provinces of China. The position of Russia was to reduce the Mongolian independence to an autonomy limited to Outer Mongolia only. The negotiations continued for 8 months as the Mongolian representatives firmly defended the independence of the country, but finally Mongolia was forced to accept the Russia's position.

Following the Russian Revolution in 1917, Chinese troops were deployed in Mongolia under the pretext of protecting her from the Bolsheviks. In late 1919, the Chinese warlord Xu Shuzheng occupied Urga and forced the Boghda Khaan and the leading nobles to sign a document that abolished Mongolia's independence. Leaders of Mongolia's national liberation movement, like Magsarjav or Damdinsuren (died in the prison under brutal tortures) were arrested and imprisoned, the Boghda Khaan was put under house arrest. The invaders installed a dictatorial regime full of robbery and murder.

Russian White Guard troops led by Baron Ungern von Sternberg defeated in the Civil War in Russia invaded Mongolia in October 1920 at the invitation of the displaced Boghda Khaan, Mongolia's civil and religious ruler. In January 1921, Ungern von Sternberg's army assaulted the capital town, Urga (now Ulaanbaatar), several times, but were repelled with heavy losses. Ungern von Sternberg ordered his troops to burn a large number of camp fires in the hills around Urga, making an appearance that the town was surrounded by an overwhelming force. In February 1921, after fighting a huge battle, he drove the Chinese out of town.

They chased out of Urga the Chinese troops, who fled to the north of Mongolia instead of retreating to the south. The Boghda Khaan's Government was restored. Khatanbaatar Magsarjav was freed, but he was forced to lead the Mongol troops at the Baron Ungern's disposal.

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• 20th century in Mongolia