Through its modern history, Mongolia has lost and restored its statehood several times. In 1924, after twelve years of independence from Manchu rule Mongolia became virtually a Soviet satellite state. Mongolia remained under communism for seventy years and it was after the disintegration of former USSR that Mongolia became really independent. Mongolia’s political opening, occurred when Mongolians overturned the ruling dictatorial regime during the 1990 strikes and demonstrations. An active young generation which promoted these reforms helped to set in motion this shift in society. These actions formed the basis for the social preconditions that moved Mongolia towards democracy. The case study of Mongolia confirms the importance of the economic, political and social historical preconditions because without the external factor of the Soviet Union, Mongolia may not have been pushed towards democracy. This political opening was crafted very carefully by leaders who did not want to foster dramatic state repression. Mongolia's Communist Party introduced Political pluralism but unlike its counterparts in those countries, the Mongolian People's Revolutionary Party (MPRP) has retained powers since 1990 despite allowing electoral competition and political freedom. It has introduced significant economic reforms which have begun to produce positive growth. When the Soviet bloc disintegrated and cut off its aid to poorer socialist countries, Mongolia experienced the most serious peace time economic collapse any nation has faced during this century. Yet Mongolia’s political road has proved remarkably smooth compared to most of the former Soviet republics. There has been no violent attempt to overthrow the government, although the opposition has been active and vocal. Political conflict has by and large been resolved through negotiation and compromise. This article traces socio-economic and political transition in Mongolia’ since the establishment of multiparty democracy in 1990.