After the dissolution of the medieval Duchy of Saxony, the name Saxony was first applied to a small territory on the middle Elbe river around the city of Wittenberg, which formerly had belonged to the March of Lusatia and about 1157 was held by Albert the Bear, the first Margrave of Brandenburg. When Emperor Frederick Barbarossa deposed the Saxon duke Henry the Lion in 1180, the Wittenberg lands belonged to Albert's youngest son Count Bernhard of Anhalt, who assumed the Saxon ducal title. Bernard's eldest son, Albert I, ceded Anhalt to his younger brother Henry, retained the ducal title and added to this territory the lordship of Lauenburg. His sons divided the possessions into the duchies of Saxe-Wittenberg and Saxe-Lauenburg. Both lines claimed the Saxon electoral dignity, which led to confusion during the 1314 election of the Wittelsbach duke Louis of Bavaria as King of the Romans against his Habsburg rival Duke Frederick the Fair of Austria, as both candidates received one vote each from the two rival Ascanian branches.
Louis was succeeded by the Luxembourg king Charles of Bohemia. After being crowned Holy Roman Emperor in 1355, Charles issued the Golden Bull of 1356, the fundamental law of the Empire settling the method of electing the German King by seven Prince-electors. The rivaling Wittelsbach and Habsburg dynasties got nothing, instead the Duke of Saxe-Wittenberg, Archmarshal of the Empire, received the right to elect, in company with six other Princes of the Empire, the King of the Romans and Emperor-to-be. In this way, the country, though small in area, obtained an influential position.
The electoral dignity was connected with it the obligation of male primogeniture; that is, only the eldest son could succeed as ruler. This forbade the division of the territory among several heirs, preventing the disintegration of the country. The importance of this stipulation is shown by the history of most of the fragmented German principalities (e.g. the Saxon Duchy of Brunswick-Lüneburg) which were not electorates.
The Ascanian line of Saxe-Wittenberg became extinct with the death of Elector Albert III in 1422, whereafter Emperor Sigismund bestowed the country and electoral dignity upon Margrave Frederick IV of Meissen, who had been a loyal supporter in the Hussite Wars. Late Albert's Ascanian relative Duke Eric V of Saxe-Lauenburg protested in vain. Frederick, now one of the seven Prince-electors, was a member of the House of Wettin, which since 1089 had ruled over the adjacent Margraviate of Meissen up the Elbe river, established under Emperor Otto I in 965, and since 1242 also over the Landgraviate of Thuringia. Thus, in 1423, Saxe-Wittenberg, the Margraviate of Meissen and Thuringia were united under one ruler, and the unified territory gradually received the name of (Upper) Saxony.
When Elector Frederick II died in 1464, his two surviving sons despite the primogeniture principle divided his territories by the Treaty of Leipzig on 26 August 1485, bringing about the still existing separation of the Wettin dynasty into the Ernestine and Albertine lines. The elder Ernest, founder of the Ernestine line, received large parts of the former Duchy of Saxe-Wittenberg and the electoral dignity united with it, as well as the southern Landgraviate of Thuringia; while younger Albert, founder of the Albertine line, received northern Thuringia and the lands of the former Margraviate of Meissen. Thus, the Ernestine line at first had the greater authority, until in the 16th century after the Battle of Mühlberg in 1547, the electoral dignity and territory fell to the Albertine line, which, when Saxony was proclaimed a kingdom in the 19th century, became a royal house. The partition decisively enfeebled the Wettin dynasty in the rivalry with the rising House of Hohenzollern, who had also achieved the electoral dignity as Margraves of Brandenburg since 1415.
The Protestant movement of the 16th century was largely effected under the protection of the Saxon rulers. Ernest's son Elector Frederick the Wise established the University at Wittenberg in 1502, at which the Augustinian monk Martin Luther was appointed professor of philosophy in 1508; at the same time he became one of the preachers at the castle church of Wittenberg. On 31 October 1517, he enclosed in a protest letter to his bishop the Ninety-Five Theses against the sale of indulgences and other Catholic practices, thus beginning what came to be called the Reformation. The Elector did not become at once an adherent of the new opinions, but granted his protection to Luther. Owing to his intervention, Pope Leo X decided against summoning Luther to Rome in 1518, and the Elector secured for Luther Imperial safe-conduct to the 1521 Diet of Worms. When Luther was declared to be under the ban of the entire empire by Emperor Charles V, the Elector had him brought to Wartburg Castle in his Thuringian estates. Lutheran doctrines spread first in Ernestine Saxony.
In 1525, Frederick died and was succeeded by his brother, John the Constant. John was already a zealous Lutheran; he exercised full authority over the Church, introduced the Lutheran Confession, ordered the deposition of all priests who continued in the Catholic faith, and directed the use of a vernacular liturgy drawn up by Luther. In 1531 he formed with a number of other ruling princes the Schmalkaldic League, for the maintenance of Protestant doctrine and for common defence against the Habsburg Emperor Charles V, a fierce opponent of the Reformation. John was followed in 1532 by his son, John Frederick the Magnanimous (died 1554), who was also one of the heads of the Schmalkaldic League. In 1542, he seized the Diocese of Naumburg-Zeitz, and confiscated the secular possessions of the Dioceses of Meissen and Hildesheim. The Catholic faith was forcibly suppressed.
Meanwhile, in the Albertine lands Duke Albert's son George (1500–39), founder of the Catholic League of Dessau, was a strong opponent of the Lutheran doctrine and had repeatedly sought to influence his Ernestine cousins in favour of the Catholic Church. However, George's brother and successor, Duke Henry IV of Saxony (1539–41), finally was won over to Protestantism by the influence of his wife Catherine of Mecklenburg, and thus the Catholic diocese of Meissen was abolished. Henry's son and successor Duke Maurice was one of the most conspicuous persons of the Reformation period: although a zealous Protestant, ambition and desire to increase his possessions led him to join the Emperor against the members of the Schmalkaldic League established by his Ernestine cousin John Frederick.
After the outbreak of the Schmalkaldic War, Elector John Frederick was placed under the Imperial ban and finally defeated and captured by Emperor Charles V at the Battle of Mühlberg on 24 April 1547. In the Capitulation of Wittenberg of May 19, he was obliged to yield former Saxe-Wittenberg with the electoral dignity to his Albertine cousin Duke Maurice, who had switched sides as tables turned. After the Capitulation, the Ernestine branch of the Wettin family only retained its possessions in Thuringia, which, by repeated divisions among the heirs from 1572 onwards, was soon cut up into the minor Ernestine duchies of Saxe-Weimar, Saxe-Coburg-Eisenach et al. Those still in existence at the time of the 1918 German Revolution after World War I were the Grand Duchy of Saxe-Weimar-Eisenach and the duchies of Saxe-Coburg-Gotha, Saxe-Meiningen and Saxe-Altenburg.
The Saxon Electorate after the Wittenberg Capitulation consisted of former Saxe-Wittenberg and Meissen together, and remained under the authority of the Albertine line of the Wettin family. Partly from resentment at not receiving also what was left of the Ernestine possessions, but moved still more by his desire to have a Protestant head to the empire, Maurice again fell away from Charles V. After the Emperor had issued the Augsburg Interim, Maurice concluded an alliance with King Henry II of France and by the 1552 Treaty of Chambord gave the Three Bishoprics of Metz, Toul, and Verdun in Lorraine to France. Maurice secretly shared in all the princely conspiracies against the Emperor, who only escaped capture by flight. During the same year, Charles V was obliged by the Peace of Passau to grant freedom of religion to the Protestant Estates.
Maurice died in 1553 at the age of 32. His brother and successor Elector Augustus (died 1586) seized the Catholic dioceses of Merseburg and Naumburg-Zeitz for himself. The last Bishop of Merseburg, Michael Helding called Sidonius, died at Vienna in 1561. The Emperor demanded the election of a new bishop, but Augustus forced the election of his son Alexander, who was eight years old, as administrator; when Alexander died in 1565 he administered the diocese himself. In the same manner after the death of Julius von Pflug, the last Catholic Bishop of Naumburg, in 1564, the Elector confiscated his bishopric and forbade the exercise of the Catholic religion. Those cathedral canons who were still Catholic were only permitted to exercise their religion for ten years more. In 1581, John of Haugwitz, the last Bishop of Meissen, resigned his office, and in 1587 became a Protestant. The episcopal domains fell likewise to Saxony, and the cathedral chapter ceased to exist.
During the reigns of the Elector Augustus (1553–86) and Christian (1586–91), a movement called Crypto-Calvinism gained strength in the electorate. During the reign of Christian II (1591–1611), the Saxon chancellor, Nikolaus Krell, who had spread the doctrine was overthrown and beheaded (1601). A more strict adherence to Lutheranism was reintroduced and with it a religious oath.
The Thirty Years' War (1618–48) occurred during the reign of Elector John George (1611–56). In this struggle, the Elector was at first neutral, and for a long time he would not listen to the overtures of King Gustavus Adolphus of Sweden. Not until the Imperial General Johann Tserclaes of Tilly advanced into Saxony did the Elector join the forces of the Swedish Empire. However, after the 1634 Battle of Nördlingen, the Elector in 1635 concluded the Peace of Prague with Emperor Ferdinand II. By this treaty, Saxony received the Margraviates of Upper and Lower Lusatia as a Bohemian fief, and the condition of the Church lands that had been secularized was not altered. The Swedes, however, revenged themselves by ten years of plundering.
By the 1648 Peace of Westphalia Saxony retained the Lusatian possessions as an Imperial fief. However, it lost forever the possibility of extending its territory along the lower course of the Elbe into the lands of the Archbishopric of Magdeburg, though under the administration of the Wettin Duke Augustus of Saxe-Weissenfels. Upon his death in 1680, the secularised Duchy of Magdeburg fell to the "Great Elector" Frederick William of Brandenburg, which confirmed the preponderance of Brandenburg-Prussia under the Protestant Hohenzollern dynasty. In 1653, the Saxon elector became the head of the Corpus Evangelicorum, the union of the Protestant Imperial Estates. Under the following Electors, religious questions were not so prominent; a rigid Lutheranism remained the prevailing faith, and the practice of any other was strictly prohibited. About the middle of the 17th century, Italian merchants, the first Catholics to reappear in the country, settled at Dresden, the capital, and at Leipzig, the most important commercial city; the exercise of the Catholic religion, however, was not permitted to them.
On 1 June 1697, Elector Frederick Augustus I "the Strong" (1694–1733) converted to Catholicism and was consequently soon elected King of Poland. The formation of a Catholic parish and the private practice of the Catholic Faith was permitted at least in Dresden. The conversion of the Elector raised fears among Lutherans that Catholicism would now be re-established in Saxony; in response the Elector transferred the authority over Lutheran churches and schools (which, until then, had been exercised by the sovereign) to a government board: the Privy Council. The Privy Council was formed exclusively of Protestants. Even after his conversion, the Elector remained the head of the Protestant body in the Reichstag, despite an unsuccessful attempt by Brandenburg-Prussia and Hanover to take over the position in 1717-1720.
His son, Elector Frederick Augustus II (1733–63), was received into the Catholic Church on 28 November 1712, at Bologna, Italy, while heir-apparent. With this conversion, which on account of the excited state of feeling of the Lutheran population had to be kept secret for five years, the ruling family of Saxony once more became Catholic. Before this, individual members of the Albertine line had returned to the Romanist church, but they had died without issue, as did the last rulers of Saxe-Merseburg (in 1738) and Saxe-Weissenfels (died out in 1746). Another collateral line founded in 1657 was that of Saxe-Zeitz, which became extinct in 1759. Those who became Catholics of this line were Christian Augustus (died 1725), cardinal and Archbishop of Gran (Esztergom, Hungary) and Maurice Adolphus, Bishop of Leitmeritz in Bohemia (died 1759).
The most zealous promoter of the Catholic faith in Saxony was the Austrian Archduchess Maria Josepha, daughter of the Emperor Joseph I, who in 1719 married Frederick Augustus, later the second elector of that name. The Court Church of Dresden was built 1739–51 by the Italian architect Chiaveri in the Roman Baroque style; heavily damaged during the bombing of Dresden and rebuilt. Notwithstanding the faith of its rulers, however, Saxony remained entirely a Protestant country; the few Catholics who settled there remained without any political or civil rights.
In 1756 during the Seven Years' War, Saxony was invaded and overrun by the forces of King Frederick II of Prussia, who took Dresden and forced the Saxon army to surrender and join the Prussian Army at the Siege of Pirna. Many later deserted and a force of Saxon troops fought to restore their independence. The Treaty of Hubertusburg in 1763 eventually restored Saxony.
When in 1806 Napoleon began a war with Prussia, Saxony at first allied itself to his long-time rival, but afterwards joined Napoleon and entered the Confederation of the Rhine. Elector Frederick Augustus III (1763–1827) received the title of King of a new Kingdom of Saxony as Frederick Augustus I.