On May 25, 1944, Nazi German invaders made an attempt on the life of Tito, who was the main partisan commander, in a daring airdrop on Drvar, Operation Rösselsprung.

After Yugoslavia dissolved, Drvar was governed by Republika Srpska until 1995. In 1995 Drvar was overrun by Croatian forces. 17,000 Serbs were ethnically cleansed, and the town was left in ruins. After the Dayton Peace Accords it became part of the Federation. From 1995-1999 the population was predominantly Croatian. Small amounts of Serbs came back to their homes, but they faced discriminatory tendencies by the Croats which prevented their further return. The local government and companies, the few that exist, are dominated by the Croats and the indigenous Serbs have difficulty finding employment.

In 2005 the majority of the population consisted of Bosnian Serb returnees (~90%) and about (~10%) Bosnian Croat settlers.

Economy

Drvar was already well known in the Austrian-Hungarian era due to the high-quality wood coming from that area. The Drvar area is still one of the largest logging and woodprocessing environments in BiH. One of the major problems in this area is the widespread corruption connected to this woodprocessing industry. It is estimated that during 2004 about 110.000m ³ of wood 'disappeared'. Average price of 1m ³ of timber (second class) is about 100 KM (100 Konvertible Mark = 50 Euros).