The waning control of the Mughal Empire left the subcontinent vulnerable to new contenders for power from Europe. The British changed the course of history by penetrating India from the Bay of Bengal, in the east; until then invading forces had entered India from the northwest, mostly by way of the Khyber Pass. The English East India Company established trading posts in Bengal and represented British interests in the region. In 1757 company forces defeated Mughal forces in Bengal in the Battle of Plassey.

This victory marked the beginning of British dominance in the subcontinent. The company continued to expand the area under its control through military victories and direct annexations, as well as political agreements with local rulers. The British annexed the area of present-day Sind Province in 1843. The region of Punjab, then under the control of the Sikh kingdom of Lahore, was annexed in 1849 after British forces won the second of two wars against the Sikhs. Some areas of Baluchistan were declared British territory in 1887.
As the British sought to expand their empire into the northwest frontier, they clashed with the Pashtun tribes that held lands extending from the western boundary of the Punjab plains into the kingdom of Afghanistan. The Pashtuns strongly resisted British invasions into their territories. After suffering many casualties, the British finally admitted they could not conquer the Pashtuns. In 1893 Sir Mortimer Durand, the foreign secretary of the colonial government of India, negotiated an agreement with the king of Afghanistan, Amir Abdur Rahman Khan, to delineate a border. The so-called Durand Line cut through Pashtun territories, dividing them between British and Afghan areas of influence. However, the Pashtuns refused to be subjugated under British colonial rule. The British compromised by creating a new province in 1901, named the North-West Frontier Province, as a loosely administered territory where the Pashtuns would not be subject to colonial laws.

The British maintained their empire in the Indian subcontinent for nearly 200 years. The first 100 years were marked by chaos and crisis. The Sepoy Rebellion, also known as the Indian War of Independence, erupted in 1857 and became a widespread revolt against British rule. After the British quelled the rebellion in 1858, they immediately took steps to maintain control. The British government officially abolished the Mughal Empire and exiled Muhammad Bahadur Shah to Burma. In addition, the British government transferred authority from the English East India Company to the British crown, establishing direct imperial rule in India. To help consolidate control the British initiated a series of educational, administrative, and political processes between 1858 and 1900. English was introduced as the official language.

The Muslim response to the imposition of British rule evolved around the ideas and leadership of Sir Syed Ahmad Khan. In 1875 Sir Syed founded Muhammadan Anglo-Oriental College (now Aligarh University) because he believed that Muslims could best improve their social and economic standing by gaining a Western education, rather than the traditional Islamic education. He encouraged Muslims to pursue higher education based on the Western model as a way to advance themselves, and their community, in the new order. He also encouraged Muslims to seek government jobs and show loyalty to the British Raj. At the same time he sought British patronage for improving the lives of the Muslims of India. He demanded a separate Muslim electorate, arguing that Muslims were at a disadvantage among India's overwhelming majority of Hindus. Hindus also were advancing themselves in the new order more quickly than Muslims, the majority of whom held low socioeconomic status as farmers and laborers. The emerging educated Muslim groups found Sir Syed's ideas inspiring.

In the 1880s the British initiated political reforms that allowed the formation of political parties and local government. The Indian National Congress was created in 1885 to advocate for Indian autonomy from British rule. Many Muslims believed the organization focused on Hindu interests, however, and in 1906 Muslims formed the Muslim League to represent their interests. Muslims demanded, and were granted, separate electorates in the Government of India Act of 1909. This guaranteed Muslims representation in the national and provincial legislative councils, although the authority of these legislative councils was severely limited under the British colonial government. Both Muslims and Hindus demanded autonomy (self-government), and in 1919 constitutional reforms were introduced that gave the legislative councils greater authority. However, the reforms fell short of granting autonomy and did not satisfy political demands. The Amritsar Massacre of 1919 further galvanized nationalist, anti-British sentiment.

The concept of an autonomous Muslim state was publicly proposed during the Allahabad session of the Muslim League in 1930 by the leading Muslim poet-philosopher in South Asia, Mohammad Iqbal. He envisioned a system in which areas that had Muslim majorities would constitute an autonomous state within India. During the next decade, this concept evolved into the demand for the partition of India into separate Muslim and Hindu nations, known as the Two Nations Theory. In 1940 Muslim League president Mohammed Ali Jinnah presided over the organization's annual session, held that year at Lahore, in which the League made its first official demand for the partition of India. The Lahore Resolution called for an independent, sovereign Muslim state.

During preindependence talks in 1946, the British government found that the stand of the Muslim League on separation and that of the Congress on the territorial unity of India were irreconcilable. The British then decided on partition and on August 14, 1947, granted independence to Pakistan. India gained its independence the next day. They both became independent dominions within the Commonwealth of Nations. Pakistan came into existence in two parts: West Pakistan, coextensive with the country's present boundaries, and East Pakistan, now known as Bangladesh. The two were separated by 1,600 km (1,000 mi) of Indian territory.