In the 20th century, Dresden continued its development to a cultural and economical centre of Germany. Famous groups of artists like "Dresdner Sezession" (Dresden Secession) and "Die Brücke" (The Bridge) emerged. Apart from the already existing Hochschule für Bildende Künste (University of Fine Arts) and the Semperoper, the Palucca Schule für Darstellende Kunst (Palucca School of Performing Arts) was founded and the Dresden Schauspielhaus (theatre) was erected.
Economical emphasis in Dresden was laid on electrical engineering, the tabacco industry and pharmaceutical as well as cosmetics companies. Odol mouthwash, for example, was originally produced in Dresden.
While Dresden was mostly unharmed by World War I, and also in the course of World war II was hardly destroyed for a long time, from February 13th to February 15th 1945, the city centre of Dresden was heavily destroyed over a wide area. Even today, this event continues to have effect on the history of the city of Dresden and its architecture.
The displacement and slaughtering of the Jewish community in Dresden as well between 1933 and 1945 preceded this event. The diaries of Victor Klemperer are important testimonials for this. For example, the works of the Dresden author Erich Kästner (When I was a little boy) fell victim to the book burnings and the expressionist painting style in the city was put to a stop in 1933.
After the war, in the era of the GDR (German Democratic Republic), the reconstruction of Dresden began according to criterions of socialist city planning. While the city centre was cleared of the expanse of ruins and many ruins of historic buildings worthy of preservation were additionally removed (like for example the ruin of the Sophienkirche on the Postplatz square in Dresden), apart from profane plattenbau housing also important examples for modern architecture were built. In the 1950s, the Altmarkt, the oldest square in Dresden, was re-built on, initially in the style of the historical urban architecture in Dresden. The Prager Straße with its nowadays slightly hidden circular-building cinema and the Kulturpalast (Palace of Culture) at the Altmarkt are major architectural monuments of the so-called "GDR Modern Era" of the 1960s and 70s and are nowadays under monumental protection.
After 1989, many new department stores were built in Dresden. Besides, the city underwent the reconstruction of the Dresden Frauenkirche and the Dresden Castle. Many modern buildings like the cinema between St. Petersburger Straße and Prager Straße, nicknamed "Kristallpalast" (Ufa-Crystal Palace), were erected. Dresden became capital city of the new Free State of Saxony and the Technische Universität Dresden (Dresden University of Technology) became a full-scale university.