After seventy years of disappointing economic performance the Republic became one of the fastest growing economies in the world. The Celtic Tiger started in the mid-1990s and boomed until 2001. It slowed down, only to pick up again in 2003. It slowed again in 2007 with recessions in 2009 and 2013 followed by comparative prosperity. The scandal of bank "bail-outs' saw Irelands debt rating go from AAA status to junk status.  Government brought in austerity budgets to repay debt.The Celtic Tiger was brought on by a combination of a rare unity among political parties to impose austerity budgets; a sizeable increase in foreign direct investment; growth in tourism brought on by Ireland's world cup success, five wins in Eurovision, and Riverdance. The building boom, rampant property speculation, and over-borrowing provided the fuel for the economy to almost collapse.

The political result was the shattering defeat for Fianna Fáil in the 2011 Irish general election, retaining only 20 out of its 71 seats in the Dáil. Fine Gael obtained a majority of seats for the first time. In 2016 Sinn Fein overtook the Labour Party as the third largest party; today it is the largest party in both the Republic of Ireland and Northern Ireland.

In 2002 the Euro replaced the punt. In 2008 the Taoiseach, Bertie Ahern, resigned as corruption scandals hit the headlines. In 2009 a damning report criticized the Irish Catholic Church hierarchy for its handling of allegations of child abuse against 46 priests. In 2011 Queen Elizabeth paid an official visit to Ireland, the first by a British monarch since independence, symbolizing the new relationship since the 1998 Good Friday Agreement.

In 2011 the Vatican recalled its ambassador to Ireland amid tension over the issue of child abuse by priests. In 2013 the Taoiseach formally apologized for the Irish state's role in the Magdalene laundries - where "troubled women" were forcibly detained and made to work without pay between 1922 to 1996. In 2015 a Referendum approved same-sex marriage by a large margin. In 2016 the Brexit decision in the UK created uncertainty over the future of Ireland. In 2018 Mary Lou McDonald took over as leader of Sinn Fein. In 2018 abortion was legalized.