The Italian Social Republic (RSI) was established on 23 September 1943, at the same time as the foundation of the Republican Fascist Party, which replaced the National Fascist Party. Mussolini, freed by German paratroopers from the Gran Sasso prison, took on his previous role as head of government. The headquarters of the new State were located in the north-east of the country, near the Brenner, the gateway to the territories of the Reich. Ministries were distributed in the cities of Veneto and Lombardy, while the town of Salò, on Lake Garda, was chosen as the "capital" of the new State.

The new State's territory covered those areas of the Italian peninsula occupied militarily by the German Army. This new State never reached full autonomy in terms of legislative, economic or territorial control since, even before the formation of the RSI, and at Hitler's orders, the occupied Italian territory was subject to the control of high commissioners, special advisers coordinated by ambassador Rahn as a “plenipotentiary of the Reich”, exercising direct control over the Italian administration. The activity of the RSI consisted of supporting the operations of the German police against the Resistance and attempting (and failing) to enlist men to the army to counter the Allied forces, through numerous communications issued by the War Minister. The RSI remained a satellite state of the Third Reich. The new State was recognised only by Germany and the occupied States.

The RSI action programme was approved at the Verona congress in November 1943, and contained the following points: a return to the socialist and republican origins of fascism, denouncing the betrayal of the monarchy; abandonment of the corporative system and establishment of a National Confederation of labour; the Republic was conceived as a presidential system with elections every five years, with a single fascist party, recognising Benito Mussolini as “duce”.