A chronology of key events:
1907 - Ugyen Wangchuck is chosen as hereditary ruler.
Lofty peaks helped to insulate Bhutan from the outside world
1910 - Treaty signed with British giving them control over Bhutan's foreign relations.
1949 - Treaty signed with newly-independent India guaranteeing non-interference in Bhutan's internal affairs, but allowing Delhi influence over foreign relations.
1952 - Reformist monarch Jigme Dorji Wangchuck succeeds to throne.
1952 - National assembly established.
1958 - Slavery abolished. Other social reforms follow in subsequent years.
1959 - Several thousand refugees given asylum after Chinese annex Tibet.
Thimpu, Bhutan's compact capital
1964, 1965 - Prime minister killed in dispute among competing political factions. Unsuccessful attempt to assassinate monarch.
1968 - First cabinet established.
1971 - Bhutan joins United Nations.
1972 - King Jigme Dorji Wangchuck dies and is succeeded by his son, Jigme Singye Wangchuck, who continues policy of cautious modernisation.
1974 - First foreign tourists allowed in.
1986 - New law granting citizenship on basis of length of residence in Bhutan.
Bhutan has a rich artistic heritage
1988 - Census leads to branding of many ethnic Nepalis as illegal immigrants. New measures adopted to enforce citizenship law. Government also introduces other measures to stress Tibetan-based Bhutanese culture, antagonising minority ethnic Nepali community.
1989 - Nepali ceases to be a language of instruction in schools.
1990 - Violent ethnic unrest and anti-government protests in southern Bhutan pressing for greater democracy and respect for Nepali rights. Bhutan People's Party begins campaign of violence. Thousands of ethnic Nepalis flee to Nepal.
Democracy and human rights
1992 - Leader of illegal Bhutan People's Party sentenced to life imprisonment.
1993 - Bhutan and Nepal try to resolve refugee problem.
Taktsang (Tiger's Nest) monastery clings to the cliff face
1996 - Nepal demands all 80,000 or so refugees should be accepted back by Bhutan.
1997 - Amnesty International raises serious concerns over human rights situation in southern Bhutan.
1998 - King cedes some powers to national assembly, giving up role as head of government; cabinet now elected by assembly; famous "Tiger's Lair" Buddhist monastery damaged by fire.
1999 - Limited television and internet services allowed; several dozen political prisoners released.
2000 - First internet cafe opens in Thimphu; Bhutan hit by landslides following severe flooding in region, causing at least 200 deaths.
2001 August - Bhutanese, Nepalese ministers meet to discuss the repatriation of Bhutanese refugees living in Nepal. Some 100,000 ethnic Nepalese say they were forced out of Bhutan in the 1980s and 1990s, alleging ethnic and political repression.
2002 January - Indian state of Assam says two rebel groups still have camps in Bhutan, despite Bhutan's deadline for them to leave the country by the end of 2001.
Bhutanese students 2003 December - Bhutanese soldiers fight Indian separatist rebels in an attempt to drive them from their bases in the south of the country.
2005 March - Proposed constitution is unveiled. It envisages a parliamentary democracy and will be adopted or rejected in a referendum.
2005 December - King Jigme Singye Wangchuck says he will abdicate in 2008, when democratic parliamentary elections are held. The crown prince will take over as monarch.
2006 June - August - Bhutanese refugees in Nepal demonstrate over several weeks to press for third-country resettlement.
2006 September - Preparations start in earnest for first ever elections in 2008. Officials begin training for the polls which will appoint a government to take over from the absolute monarchy.