A low-lying region with excellent natural harbors along the Baltic coast, the state has fertile agricultural land except in the center, where heaths and moors predominate. Farming (grain, potatoes, and vegetables) and cattle raising are pursued, although agricultural production accounts for less than one tenth of the state's yearly output. Shipping and fishing are important along the coasts. Manufactures of Schleswig-Holstein include ships, textiles, electrical goods, paper, clothing, and machinery. There are oil fields in the Dithmarschen region in the southwest. The islands of Sylt and Föhr and the southern Baltic coast are popular tourist resorts, while Eutin, Lübeck, and Schleswig are historic centers.

With respect to the history of Schleswig-Holstein, Lord Palmerston once proclaimed it to be so complicated that only three men had ever fully understood it—one being Prince Albert, who was dead; the second, a professor, who had become insane; the third, Palmerston himself, who had forgotten it. (For the history of the area to the late 18th cent. see the articles Holstein and Schleswig.)

From 1773 the kings of Denmark held both duchies—Schleswig as full sovereigns, Holstein as princes of the Holy Roman Empire; both duchies were in personal union with, but not part of, Denmark. The Congress of Vienna (1814–15) did not change the status of the two duchies, except that the German Confederation had succeeded the Holy Roman Empire in its suzerainty over Holstein. A constitution for Holstein was guaranteed by the German Confederation.

Because of the growing national consciousness of the predominantly German population in the two duchies, any change in their status that would tie them more closely to Denmark was a potentially explosive issue. When King Christian VIII announced (1846) that succession by females was to apply not only to the Danish throne but to Schleswig as well, there was violent opposition among German nationalists, who feared the complete incorporation of Schleswig into Denmark. Nevertheless, on the pressure of the Danish nationalists, Frederick VII, who succeeded Christian, declared the complete union of Schleswig with Denmark in 1848. Revolution broke out in both duchies, a provisional government was established in Kiel, and the German Confederation came to the aid of the rebels and occupied the duchies. British intervention led to an armistice in the German-Danish fighting, but in 1849 the war was resumed. After inconclusive fighting, peace was made in 1850 between Prussia (which had been commissioned by the Confederation to conduct the war) and Denmark; both sides reserved their rights.

The fact that Frederick VII was childless made the Schleswig-Holstein succession a burning European issue. The question was taken up by the powers in a conference at London, and in 1852 Prussia, Austria, and other major powers (but not the German Confederation as a body) signed the Treaty of London. The treaty guaranteed the territorial integrity of Denmark, and settled the succession to Denmark and both duchies on the Glücksburg branch of the Danish royal house, which derived its claim through the female line. Duke Christian Augustus of Augustenburg, who represented a collateral line, renounced his claim to the duchies and accepted a money indemnity; Denmark in turn guaranteed the inseparability of the duchies and their continued status in personal union with Denmark.

In 1855, pressure from Danish nationalists forced Frederick VII to proclaim the Danish constitution as valid for both duchies. The protest of the German Confederation led to the withdrawal (1858) of that measure, but in Nov., 1863, just before Frederick's death, a common constitution for Denmark and Schleswig was drawn up. His successor, Christian IX, signed the constitution, which the German diet declared in violation of the protocol. In Jan., 1864, Prussia and Austria declared war on Denmark, which was easily defeated.

The disposal of the duchies was still at issue. Austria favored the claims of the duke of Augustenburg, who denounced the surrender of the Augustenburg claim by his father in 1852; but Bismarck, who was guiding Prussian policy, had already resolved to annex the duchies and had encouraged the Danish War with that end in view. By the Treaty of Gastein (1865) with Austria, Bismarck deliberately imposed a solution that was bound to create friction with Austria. Schleswig was placed under Prussian administration and Holstein under Austrian administration, while the duchy of Lauenburg (also lost by Denmark in 1864) went to Prussia in return for a money payment to Austria. The dual administration led, as Bismarck had anticipated, to such tension that Austria could easily be maneuvered into a war with Prussia. The Austro-Prussian War of 1866 ended with a swift (7 weeks) Prussian victory; Schleswig, Holstein, and Lauenburg were annexed to Prussia and became the province of Schleswig-Holstein.

After World War I the Danish majority of N Schleswig determined by plebiscite (1920) the return of that part of the province to Denmark. The former free city of Lübeck and the Lübeck district of Oldenburg were incorporated into Schleswig-Holstein in 1937. After World War II, Schleswig-Holstein was constituted (1946) as a state of West Germany, and in 1990 it became a state of reunified Germany.