Lateran Treaty
Negotiations for the settlement of the Roman Question began in 1926 between the government of Italy and the Holy See, and culminated in the agreements of the Lateran Pacts, signed—the Treaty says—for King Victor Emmanuel III of Italy by Benito Mussolini, Prime Minister and Head of Government, and for Pope Pius XI by Pietro Gasparri, Cardinal Secretary of State, on 11 February 1929. It was ratified on 7 June 1929. The agreements were signed in the Lateran Palace, hence the name by which they are known.
Papal States
By 1861, much of the Papal States' territory had been conquered by the Kingdom of Italy. Only Lazio, including Rome, remained under the Pope's temporal control. In 1870, the Pope lost Lazio and Rome and had no physical territory at all, except the Basilica of St Peter and the papal residence and related buildings around the Vatican quarter of Rome, which the new Italian state did not occupy militarily. In 1929 the head of the Italian government, at the time the Italian Fascist leader Benito Mussolini, ended the crisis between unified Italy and the Holy See by negotiating the Lateran Treaty, signed by the two parties. This recognized the sovereignty of the Holy See over a newly created international territorial entity, the Vatican City State, limited to a token territory.