Charles succeeded to the thrones in November 1916 after the death of his grand-uncle, Emperor Franz Joseph. On 2 December 1916, he assumed the title of Supreme Commander of the whole army, succeeding Archduke Friedrich. His coronation as King of Hungary occurred on 30 December. In 1917, Charles secretly entered into peace negotiations with France. He employed his brother-in-law, Prince Sixtus of Bourbon-Parma, an officer in the Belgian Army, as intermediary. However, the Allies insisted on Austrian recognition of Italian claims to territory and Charles refused, so no progress was made. Foreign minister Graf Czernin was only interested in negotiating a general peace which would include Germany, Charles himself went much further in suggesting his willingness to make a separate peace. When news of the overture leaked in April 1918, Charles denied involvement until French Prime Minister Georges Clemenceau published letters signed by him. This led to Czernin's resignation, forcing Austria-Hungary into an even more dependent position with respect to its seemingly wronged German ally.
From the beginning of his reign, Karl favored the creation of a third Croatian political entity in the Empire, in addition to Austria and Hungary. In his Croatian coronation oath in 1916, he recognized the union of the Triune Kingdom of Croatia, Dalmatia and Slavonia with Rijeka and during his short reign supported trialist suggestions from the Croatian Sabor and Ban, but the suggestions were always vetoed by the Hungarian side which did not want to share power with other nations. After Emperor Karl's manifesto of 14 October 1918 was rejected by the declaration of the National Council in Zagreb. President of the Croatian pro-monarchy political party Pure Party of Rights Dr. Aleksandar Horvat, with other parliament members and generals went to visit the emperor on 21 October 1918 in Bad Ischl, where the emperor agreed and signed the trialist manifesto under the proposed terms set by the delegation, on the condition that the Hungarian part does the same since he swore an oath on the integrity of the Hungarian crown. The delegation went the next day to Budapest where it presented the manifesto to Hungarian officials and Council of Ministers who signed the manifesto and released the king from his oath, creating a third Croatian political entity (Zvonimir's kingdom). After the signing, two parades were held in Zagreb, one for the ending of the K.u.K. monarchy, which was held in front of the Croatian National Theater, and another one for saving the trialist monarchy. The last vote for the support of the trialist reorganization of the empire was, however, too late. On 29 October 1918, the Croatian Sabor (parliament) ended the union and all ties with Hungary and Austria, proclaimed the unification of all Croatian lands and entered the State of Slovenes, Croats and Serbs. The curiosity is that no act of Sabor dethroned King Karl IV, nor did it acknowledge the entering in a state union with Serbia, which is today mentioned in the preamble of the Constitution of Croatia.