The Treaty of Berlin brings a period of manipulation by the Austro-Hungarian Empire.

The empire suppresses Muslim and Orthodox opposition to the occupation and introduces an orderly administration, but it retains the feudal system because Bosnia and Herzegovina technically remain Turkish states.

Seeking to increase the Catholic population of Bosnia, Vienna sends Austrian, Hungarian, Croatian, and Polish administrators and colonizes northern Bosnia with Catholic Slavs and Germans.

The administrator of the regions, Baron Benjamin Kallay (1882-1903), fosters economic growth, reduces lawlessness, improves sanitation, builds roads and railroads, and establishes schools.

However, Kallay, a Hungarian, exploits strong nationalist differences among the Muslim Slavs, Catholic Croats, and Orthodox Serbs.