The new Hungarian republic was soon menaced by Bela Kun (1885-c. 1939), a Bolshevik sent from Russia by Vladimir I. Lenin (1870-1924), established the Hungarian Communist Party on December 20, 1918. When Count Michael Karolyi (1875-1955), Hungary's president, resigned (March 21, 1919) in protest against the Allies's demands for more Hungarian territorial concessions, a coalition government of Communists and Social Democrats was formed under the leadership of Kun, who soon pushed out the latter and secured a Communist dictatorship... At home, nationalization of Hungary's landed estates, instead of division among the peasantry, lost Kun the support of the peasants, and the bourgeoisie withdrew its backing because of his increasing terror tactics against opposition... Hungarian counterrevolutionaries attempted to overthrow Kun and the Communists... 

The rise of the Hungarian Communist Party (HCP) to power was swift. The party was organized in a Moscow hotel on November 4, 1918, when a group of Hungarian prisoners of war and communist sympathizers formed a Central Committee and dispatched members to Hungary to recruit new members, propagate the party's ideas, and radicalize Karolyi's government. By February 1919, the party numbered 30,000 to 40,000 members, including many unemployed ex-soldiers, young intellectuals, and Jews. In the same month, Kun was imprisoned for incitement to riot, but his popularity skyrocketed when a journalist reported that he had been beaten by the police. Kun emerged from jail triumphant when the Social Democrats handed power to a government of "People's Commissars," who proclaimed the Hungarian Soviet Republic on March 21, 1919.

The communists wrote a temporary constitution guaranteeing freedom of speech and assembly; free education, language and cultural rights to minorities; and other rights. It also provided for suffrage for people over eighteen years of age except clergy, "former exploiters," and certain others. Single-list elections took place in April, but members of the parliament were selected indirectly by popularly elected committees. On June 25, Kun's government proclaimed a dictatorship of the proletariat, nationalized industrial and commercial enterprises, and socialized housing, transport, banking, medicine, cultural institutions, and all landholdings of more than 40.5 hectares. Kun undertook these measures even though the Hungarian communists were relatively few, and the support they enjoyed was based far more on their program to restore Hungary's borders than on their revolutionary agenda. Kun hoped that the Soviet Russian government would intervene on Hungary's behalf and that a worldwide workers' revolution was imminent. In an effort to secure its rule in the interim, the communist government resorted to arbitrary violence. Revolutionary tribunals ordered about 590 executions, including some for "crimes against the revolution." The government also used "red terror" to expropriate grain from peasants. This violence and the regime's moves against the clergy also shocked many Hungarians.