The history of Christianity runs deep and rich within the boundaries of what we know today as Italy. At one time, an entire swath in the central part of the current country's borders was known as the Papal States, stretching from modern-day Rome to Venice and organized with the pope as both spiritual and civil ruler. Those states existed until 1870, when, after about a decade of territorial handovers, the last of the church-run land was absorbed into what would become today's nation of Italy.

Vatican City itself was not recognized until 1929, creating what from the early 1860s until that year was known as “the Roman Question.” When Rome became capital of the newly formed Italy in 1861, nobody within the former Papal Sates or within the new Italian government quite knew what to do with the religious leaders or the walled-in area where they lived. The pope would not recognize the Italian king's right to govern them inside of Rome, even though their land was inside the very city that had just become Italy's capital. Thus, the pope and his fellow religious leaders refused to leave their compound until the question was resolved, which took a solid generation of negotiations.

The Lateran Treaty, signed by Benito Mussolini on behalf of Italy, officially created Vatican City in 1929, recognizing the full sovereignty of the Holy See — the central government of the Catholic Church since the early days of Christianity — within the boundaries of the newly formed city-state. Thus, Vatican City and the Holy See are two distinct entities, but they are intertwined for practical purposes. For instance, ambassadors who come from Vatican City are said to represent the Holy See, not Vatican City as a state. The pope has total legislative, judicial, and executive power in Vatican City, where he lives inside the papal apartments just off St. Peter's Square.