The German flag never flew over Baku, and World war II didn?t directly touch Azeri territory However the war affected the country in a number of ways, not all negative, as we'll see below. The German Wehrmacht and Luftwaffe mounted great pressure on the Caucasus region, in order to make more resouces availabel to the oil thirsty German war machine. Germany managed to push the Soviets eastards and in the summer of 1941 they occupied Grozny in Chechnya and were at the doors of Astrakhan, leaving only a thin corridor along the Caspian to link Azerbaijan with the rest of the USSR. Eventualy the German High Command, not having learned the lessons from the French, had its troops pushed back by the Russian winter, not without costing the lives of many Azeri soldiers, fighting both with the Red Army and the Wehrmacht (mainly the 162nd Turkoman Infantry Division).

Before the Germans had a chance to have their faces caressed by the Caspian winds, Britain and the USSR became allies in 1941 and immediately mounted a joint invasion of Persia. The purpose was tree-fold: to protect the Soviet rear from a German drive through the Caucasus, to provide a supply route to the USSR and to protect the strategic Bagdad-Khanaquin-Kermanchah-Hamadan-Teheran route. On August 1941, British and American troops took over southern Persia and  the Red Army occupied South Azerbaijan. In 1942 a trilateral agreement was signed by Britain, Russia and Iran, stipulating that the allied troops should leave Iran "during the six months following the end of the war". During the occupation the about five million tons of war supplies reached the USSR through this Persian corridor. During 1944 divisions between the allies become clear as the British and Americans extend their control of the Iranian oil resources with an agreement between Anglo-Iranian  and Standard Oil and the Soviets demand the creation of a mixed Soviet-Iranian oil company for South Azerbaijan.

By the spring of 1945, the Fuhrer of the German Reich was dead and its armies had surrendered. Soon after the end of the war the British and American troops departed. But the USSR refused to withdraw. The Red Army remained. It looked as if it was there to stay. In fact, in 1945, Stalin sought to unite the Azeri Soviet Republic with (Iranian) South Azerbaijan, which had (and still has) a majority Azeri population. In their zone of occupation the Soviets proclaimed a Republic with its capital in Tabriz, headed by Jafar Pishevari and supported by the Toudeh communists.

The Soviet refusal to leave originated was a wave of international protest and the case reached to the UN Security Council. Public opinion forced the USSR to retreat in May 1946.  The Pishevari Republic collapses, and Teheran regains control of South Azerbaijan. Following this new separation between north and south Azerbaijan, the north spent the next forty five years as a minor Soviet Republic.

During Stalin's regime, Azerbaijan suffered, as did other Soviet republics, from forced collectivization and far-reaching purges. Yet during the same period, Azerbaijan also achieved significant gains in industrialization and literacy levels that were impressive in comparison with those of other Muslim states of the Middle East at that time.

After Stalin Moscow's intrusions were less sweeping but nonetheless authoritarian. In 1959 Nikita S. Khrushchev, first secretary of the Communist Party of the Soviet Union (CPSU), moved to purge leaders of the Azeri Communist Party (ACP) because of corruption and nationalist tendencies. Leonid I. Brezhnev, Khrushchev's successor, also removed ACP leaders for nationalist leanings, naming Heydar Aliyev in 1969 as the new ACP leader.

Heydar Aliyev emerged as the most influent Azeri politician during the post war years was, successively head of the Azeri KGB (1967), head of the republic itself (1969), and then a full member of the Soviet Politburo (1982) and first deputy chaiman of the USSR Council of Ministers. However Mikhail S. Gorbachev removed Aliyev in 1987, ostensibly for health reasons, although later Aliyev was accused of corruption.

As the Soviet Union started to break up towards the end of the 1980s, it was the issue of Nagorno-Karabakh that proved decisive in Azerbaijan's political development. Popular discontent over the progress of the war led to the marginalisation of the Communist Party in Azerbaijan and the rise of the nationalist Popular Front during the late 1980s.