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After World War I, when Austria-Hungary was dissolved, Sibiu became part of Romania; the majority of its population was still ethnic German (until 1941) and counted a large Romanian community, as well as a smaller Hungarian one.

Between the Hungarian Revolution of 18 (the year of the Ausgleich), Sibiu was the meeting-place of the Transylvanian Diet, which had taken its most representative form after the Empire agreed to extend voting rights in the region.

During the 18th and 19th centuries, the city became the second- and later the first-most important centre of Transylvanian Romanian ethnics.

The first Romanian-owned bank had its headquarters here (The Albina Bank), as did the ASTRA (Transylvanian Association for Romanian Literature and Romanian's People Culture).

In the 14th century, it was already an important trade centre. Sibiu became the most important ethnic German city among the seven cities that gave Transylvania its German name Siebenbürgen (literally seven citadels).

It was home to the Universitas Saxorum (Community of the Saxons), a network of pedagogues, ministers, intellectuals, city officials, and councilmen of the German community forging an ordered legal corpus and political system in Transylvania since the 1400s.

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