Germany established a protectorate in 1885 and set up trading stations on the islands of Jaluit and Ebon to carry out the flourishing copra (dried coconut meat) trade. Marshallese Iroij (high chiefs) continued to rule under indirect colonial German administration.
At the beginning of World War II, Japan assumed control of the Marshall Islands. Their headquarters remained at the German center of administration, Jaluit. On January 31, 1944 American forces landed on Kwajalein atoll and U.S. Marines and Army troops later took control of the islands from the Japanese on February 3, following intense fighting on Kwajalein and Enewetak atolls. In 1947, the United States, as the occupying power, entered into an agreement with the UN Security Council to administer much of Micronesia, including the Marshall Islands, as the Trust Territory of the Pacific Islands.
From 1946 to 1958 there were 67 nuclear weapon tests on various atolls. A significant radar installation was constructed on Kwajalein atoll.
On May 1, 1979, in recognition of the evolving political status of the Marshall Islands, the United States recognized the constitution of the Marshall Islands and the establishment of the Government of the Republic of the Marshall Islands. The constitution incorporates both American and British constitutional concepts.
The islands signed a compact of association with the US in 1986 and up to 1999 the islanders received US $180M for continued American use of Kwajalein atoll, US $250M in compensation for nuclear testing, and $600m in other payments under the compact.
Despite the constitution the government was largely controlled by traditional chiefs. It was not until 1999 following corruption allegations that the aristocratic government was overthrown, with Imata Kabua replaced by the 'commoner' Kessai Note.