ABSTRACT
Berlin Treaty of dated 1878 is an important begining in the relations of Austria-Hungary-Serbian. These relations were seen in favorable direction until the Karajauvic dynasty came into power in Serbia in 1903. After this date, the policy of Serbian against Austria-Hungary has came along in different direction. Austria-Hungarian occupation of Bosnia-Herzegovina, living many Serbs, which was crucial for the establishment of the "Great Serbian" state for Serbia, caused to break down the relations between two countries in 1908. The Sarajevo homicide, which took place in June 1914, broke the bonds between the two states, and this event was the development leading to the outbreak of World War I. This study aims to present the controversy between two countries towards World War I.