Western-educated and autocratic, Mihajlo has liberalized the constitution and in 1867 secures the withdrawal of Turkish garrisons from Serbian cities.

Industrial development begins at this time, although eighty percent of Serbia's one-and-a-quarter million people remain illiterate peasants.

The feud that had erupted in 1817 between the Karadjordjevic and Obrenovic families continues to divide Serbian society between supporters of the rival clans.