In November 1992 East Timorese resistance leader Xanana Gusmão was captured and imprisoned by the Indonesian government. In May 1993 he was tried and found guilty of rebellion, illegal possession of firearms and attempting to separate part of the territory of Indonesia. His sentence of life imprisonment was commuted to 20 years by Indonesian President Suharto in August 1993. However, Gusmão continued to serve as a symbol of hope from inside prison, leading the resistance until his release in 1999.

In May 1999 the Indonesian and Portuguese governments announced they would hold a referendum on 30 August 1999 to decide on the future of East Timor. Voters rejected the offer of East Timor becoming an autonomous province within Indonesia, and voted overwhelmingly in favour of independence. In retaliation, Indonesian military and Indonesia-backed paramilitaries carried out a campaign of violence and terrorism, leaving up to 1,000 people dead and forcing a quarter of the population to flee, mostly to West Timor. Sanctioned by the United Nations, the Australian-led International Force for East Timor (INTERFET) was deployed to the capital, Dili, in September 1999 to restore order to the region.

The United Nations Transitional Administration in East Timor was established in October 1999 and administered the region until East Timor formally became independent on 20 May 2002. Xanana Gusmão was sworn in as the country’s first President.