The annexation followed the secret protocol of the Molotov-Ribbentrop Pact, signed by Hitler and Stalin in August 1939, which assigned Estonia to the Soviet sphere of influence in exchange for German freedom of action elsewhere. By the standards of international law in force at the time, the occupation was illegal, and the United States, the United Kingdom, and many other governments refused to recognize the annexation de jure. Estonian diplomats continued to function abroad in the name of the prewar republic, an anomaly that lasted until 1991. The principle that emerged from this stubborn non-recognition, the doctrine of legal continuity, would later allow restored Estonia to claim it had never legally ceased to exist.

The Soviet year of 1940-1941 was catastrophic. Land, banks, and major industries were nationalized within weeks. Over 8,000 Estonians were arrested in the first year alone, including most of the country's leading politicians and military officers; about 2,200 of them were executed inside Estonia, while most of the rest were sent to camps in Russia, from which few returned. Commander-in-chief General Johan Laidoner was captured by the NKVD in July 1940 and died in Vladimir Prison in 1953. President Päts was deported to Ufa and died in a psychiatric hospital in Kalinin in 1956. On the night of 14 June 1941, the first mass deportation hit: roughly 10,000 Estonians, including women, children, and the elderly, were loaded into cattle cars and shipped to Siberia. A week later Germany invaded the Soviet Union and the occupation regime fled.

Nazi Germany held Estonia from 1941 to 1944 as part of Reichskommissariat Ostland. Some Estonians initially welcomed the Wehrmacht as liberators from Soviet terror, only to find another occupation. Estonia's Jewish population, small but ancient, was murdered almost in its entirety. Estonian Forest Brothers fought as partisans, some against the Soviets, some against the Germans, some against both at different times. Many Estonian men were conscripted, willingly or not, into German units, including the 20th Waffen-Grenadier Division. The simple stories of resistance and collaboration that postwar regimes preferred do not hold up. Most Estonians spent these years trying to keep their families alive in a country whose government had been twice destroyed.

When the Red Army returned in 1944, around 80,000 Estonians fled west by sea to Sweden and Germany. The 1949 March deportation was even larger than 1941: roughly 20,000 more people were exiled to Siberia, mostly the families of farmers who had resisted collectivization. By 1957, Soviet Estonia was 99.3% collectivized. Russification followed: massive immigration from elsewhere in the USSR drove the ethnic Estonian share of the population from 88% in 1934 to 62% by 1989. Through it all, the Soviet authorities renamed streets, demolished interwar war memorials, dismantled the graves of independence-era soldiers, and tried to erase the memory of the republic. They did not succeed. The Estonian language survived in homes, in song festivals, and in the Finnish television signals that drifted across the Gulf of Finland after a Tallinn-Helsinki ferry line opened in 1965, giving Estonians a window onto the West that no other Soviet republic enjoyed.

By the late 1980s, Gorbachev's perestroika cracked the system open. On 16 November 1988, Estonia became the first Soviet republic to declare state sovereignty. On 23 February 1989, the Soviet flag was lowered from Pikk Hermann tower, and the next day, the 71st anniversary of the original 1918 declaration, the blue-black-white flag of Estonia rose in its place. Half a million people, a quarter of the population, gathered to sing forbidden national songs at the Tallinn Song Festival Grounds. On 20 August 1991, during the Soviet coup attempt, Estonia declared full restoration of independence. Iceland recognized it two days later. The Soviet Union recognized it on 6 September. The last Russian troops left in August 1994. Today, the National Library, the Museum of Occupations, and the Stenbock House plaque commemorate those killed and deported, a quiet and persistent insistence that what happened here mattered.