In the 9th and 10th century, Silla was shaken by problems arising from its reliance on the "bone rank system", a rigid class system under which only those from an aristocratic background could be appointed to high office. The system was being abused as a means for the ruling royal family to dominate politically and this caused much unrest in the latter days of Silla. The local gentry called hojok (hangul:호족, hanja: 豪族), i.e. prominent local clan, strengthened their power during this chaotic period by assembling armies of their own and independently centralizing their forces. Dissention deepened within the nobility after the death of King Hyegong as contention over the royal succession intensified and power struggles were constant among the hojok. Not only was the political atmosphere in a shambles, the financial state of Silla was dire. Taxation was difficult without the nobles' cooperation. As a result, the tax burden fell heavily on the peasants and farmers, who consequently revolted in 889, the third year of Queen Jinseong's reign. Numerous revolts and uprisings occurred during the following 100 years, breaking Silla down.
As Silla started to crumble, Gyeon Hwon, a former general of Silla, led rebel troops to seize the provincial capital of Mujinju (hangul:무진주, hanja:武珍州) in 892. He then conquered the Honam region and in 900, Gyeon Hwon declared himself king of Later Baekje, a country to revive Baekje's glory. He established his capital at Wansanju (hangul:완산주, hanja:完山州), and continued to expand the kingdom.
Gung Ye from Silla is believed to come from a royal or noble background. Some historians theorize that he was descended from Go Anseung who was given the Silla's "Kim" royal surname. He was a Buddhist monk but soon joined in the political uprisings, and became leader of many troops. He conquered much land and set up base in Myeongju (hangul:명주, hanja:溟州) in 895 with the support of many regional leaders, including general Wang Geon. In 901, Gung Ye founded Later Goguryeo but changed the name to Majin in 904, and moved the capital to Cheorwon. He changed the name to Taebong in 911.
Although Later Baekje started out as the front runner in national strength thanks to its fertile plains and diplomatic ties with China, Later Goguryeo soon became the largest force in the new three kingdom era as it quickly expanded its territory to almost three quarters of the peninsula under Gung Ye and the general Wang Geon. As time passed however, Gung Ye started to call himself the Maitreya Buddha and resort to despotism, causing him to be overthrown by Wang Geon in 918. Wang Geon established a new dynasty called Goryeo and moved the capital to Song-ak (hangul:송악, hanja:松嶽) the following year, creating the new troika of Goryeo, Baekje and Silla.
The three kingdoms were in a constant power struggle, although by this time Silla had weakened to a despondent state and did not pose much of a threat to the other two nations. Later Baekje led with an offensive approach but Wang Geon of Goryeo placed more importance on diplomatic ties, which endeared his kingdom to Silla. The conflict between Later Baekje and Goryeo was constant near Silla territory, as both countries wanted to wield their power over the region. Later Baekje led by attacking Gyeongju, the capital of Silla, in 927 and crushing the Goryeo army. Goryeo retaliated by winning the battle of Gochang in 930 and reclaiming the territory of Ungjin in 934.
In 935, King Gyeongsun of a very weakened Silla surrendered to Goryeo. During this time, inner power struggles within Hubaekje weaken a country already fatigued from warfare. Gyeon Hwon named his youngest son Geumgang as heir, but his other sons (by a previous wife) joined forces and rebelled, placing Gyeon Hwon's eldest son Singeom on the throne and confining Gyeon Hwon to Geumsan Temple. Gyeon Hwon later escaped to Goryeo and joined forces with Wang Geon's army to attack the very country he founded. Later Baekje fell to Goryeo in 936 and the peninsula was reunified.