Amanollah launched the inconclusive Third Anglo-Afghan War in May 1919. The month-long war gained the Afghans the conduct of their own foreign affairs. The Treaty of Rawalpindi was signed on Aug. 8, 1919, and amended in 1921. Before signing the final document with the British, the Afghans concluded a treaty of friendship with the new Bolshevik regime in the Soviet Union; Afghanistan thereby became one of the first nations to recognize the Soviet government, and a "special relationship" evolved between the two governments and lasted until December 1979, when the Soviet Union invaded Afghanistan.

Amanollah changed his title from amir to padshah ("king") in 1923 and inaugurated a decade of reforms--including constitutional and administrative changes, removal of the veil from women, and coeducational schools--that offended conservative religious and tribal leaders.

Civil war broke out in November 1928, and a Tadzhik folk hero called Baccheh Saqow (Bacha Saqqao; "Son of a Water Carrier") occupied Kabul. Amanollah abdicated on Jan. 14, 1929, in favour of his elder brother, Inayatollah, but Baccheh Saqow proclaimed himself Habibollah Ghazi (or Habibollah II), amir of Afghanistan. Amanollah failed to retrieve his throne and went into exile in Italy. He died in 1960 in Zürich.