Humans have lived in the Ethiopian region for over three million years; the oldest discovered human remains were found just north of Ethiopia. Settlers came into Ethiopia from the Arabian peninsula and different regions of Africa. Many groups developed their own culture and customs, interacting little with other. Today, the country has more than 70 distinct ethnic groups.

In the 1st century AD, the kingdom of Axum was established in the highlands of southern Eritrea and Ethiopia. During the 4th century the people of Axum became Christian. Some centuries later, power passed to the Agaws and then to the Amharas, who moved their capital and their empire progressively south until they ruled most of the central plateau.

Islam reached Ethiopia in the 7th century, but initially there was little conflict between Christians and Muslims. By the 15th century, however, territorial disputes led to clashes; the emperor called on Portuguese help to defeat a particularly serious threat from Muslims in 1541.

The Portuguese attempted to colonize Ethiopia for many years, and missionaries tried to persuade Ethiopian Christians to adopt Catholicism. However, Emperor Menelik II would-be colonizers, the British Ethiopia is one of the few African countries that was never colonized.

Haile Selassie (1892-1975) was Ethiopia's last emperor. In the early years of his rule he outlawed slavery, introduced a constitution and parliament, and encouraged education and health reforms. In 1923, he succeeded in getting Ethiopia admittance to the League of Nations, yet in 1936 had to fight another Italian invasion. Allied forces helped Ethiopia defeat the Italians in 1941. Peace did not last long. In 1952, the former Italian colony of Eritrea was federated with Ethiopia, and in 1960 the Eritreans launched a secessionist movement that led to war, which continued for 30 years.

Despite various reforms, Emperor Selassie he did not modernize Ethiopia's economy, and citizens had little political freedom. Public discontent grew and strengthened after a 1973 famine caused the death of 300,000 people. Demonstrations in 1974 led to the overthrow of the monarchy, and in 1975, a new government called the Derg (Committee) declared Ethiopia a socialist state. Colonel Mengistu Haile-Mariam became the leader of the Derg and later declared himself president.

Mengistu's regime was often brutal; in the "red terror" campaign of 1977-78, more than 10,000 people were killed in Addis Ababa alone. Government repression, war and repeated drought caused the displacement of millions; many sought refuge abroad. Various liberation groups took up arms against Mengistu's government, toppling the regime in 1991. A transitional government ruled until 1995, when an elected legislature took over. A new constitution defined the country as a federation of nine states and two cities, headed by Prime Minister Meles Zehawi since 1991.

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Yeha in northern Ethiopia was the site of its earliest known capital and is considered the birthplace of Ethiopian civilization. The sandstone temple ruins there date from between 800 and 500 BC.