An independence movement took place that was not limited to just North (outer) Mongolia but was a pan-Mongolian phenomenon. On 29 December 1911, Bogd Khan became the leader of the Mongol empire. Inner Mongolia became a contested terrain between Khan and the Republic. In general, Russia supported the Independence of Outer Mongolia (including Tannu Uriankhai) during the time of the Xinhai Revolution. Tibet and Mongolia then recognized each other in a treaty.
On 28 November 1989, at the end of a speech at the Young Artists' Second National Congress, Tsakhiagiin Elbegdorj said that Mongolia needed democracy and appealed for youth to collaborate to create democracy in Mongolia.
On the morning of 10 December 1989, the first open pro-democracy public demonstration occurred in front of the Youth Cultural Center in Ulaanbaatar. There, Elbegdorj announced the creation of the Mongolian Democratic Union. There the Democratic Union-first pro-democracy movement in Mongolia was born.
On 2 January 1990, Mongolian Democratic Union began distributing leaflets calling for a democratic revolution. When the government did not comply with this and later, more aggressive demands, demonstrations occurred.
On 14 January 1990, the protesters, having grown from three hundred to some 1,000, met on square in front of Lenin Museum which was named as Freedom Square since then in Ulaanbaatar.
After numerous demonstrations of many thousands of people in the capital city as well as provincial centers, on 4 March 1990, the MDU and three other reform organizations held a joint outdoor mass meeting, inviting the government to attend. The government sent no representative to what became a demonstration of over 100,000 people demanding democratic change.
On March 7, 1990, on Sükhbaatar Square, Democratic Union launched a hunger strike of ten urging that the communists to resign. Hunger strikers number increased and thousands supported them. Mongolian People's Revolutionary Party(MPRP) (present Mongolian People's Party)'s Politburo – the authority of the government eventually gave way to the pressure and entered into negotiations with the leaders of the democratic movement Mongolian Democratic Union.
Jambyn Batmönkh, chairman of Politburo of MPRP's Central Committee decided to dissolve the Politburo and to resign on 9 March 1990. Behind the scenes, however, the MPRP had seriously considered cracking down on the protesters, writing a decree that was left to be signed by the party leader Jambyn Batmönkh.
The People's Great Khural (upper house) first met on 3 September and elected a president (MPRP), vice president (Social Democrat), prime minister (MPRP), and 50 members to the Baga Hural (lower house). The vice president was also chairman of the Baga Khural.
The new constitution entered into force on 12 February 1992. In addition to establishing Mongolia as an independent, sovereign republic and guaranteeing a number of rights and freedoms, the new constitution restructured the legislative branch of government, creating a unicameral legislature, the State Great Khural (SGK).
A Democratic Union Coalition co-led by Democratic Party chairman Tsakhiagiin Elbegdorj for the first time succeeded in winning the majority in the 1996 parliamentary elections.