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This led frustrated Tennesseans to form the breakaway State of Franklin in 1784, with John Sevier named as governor. The fledgling state began operating as an independent, though unrecognized, government, with leaders of the Cumberland settlements making overtures for an alliance with Spain, which controlled the lower Mississippi River. Such stirrings of independence caught the attention of North Carolina, which quietly began to reassert control over its western counties, dooming the State of Franklin, which passed out of existence in 1788.

When North Carolina ratified the U.S. Constitution in 1789, it also ceded its western lands, the Tennessee country, to the Federal government. North Carolina had used these lands as a reward for its Revolutionary soldiers and reserved the right to satisfy further land claims in Tennessee. Congress designated the area as the "Territory of the United States, South of the River Ohio", more commonly known as the Southwest Territory. President George Washington appointed William Blount, a prominent North Carolina politician as territorial governor. In 1795, a territorial census revealed a sufficient population for statehood, and a referendum showed a three-to-one majority in favor of joining the Union.

Delegates from all the counties met in Knoxville and drew up a model state constitution and democratic bill of rights. Tennessee leaders thereby converted the territory into a new state, with organized government and constitution, before applying to Congress for admission. Since Tennessee was the first Federal territory to apply for admission to the Union, Congress was uncertain of how to proceed. In a close vote on June 1, 1796, Congress approved the admission of Tennessee as the sixteenth state of the Union. Its borders were drawn by extending the northern and southern borders of North Carolina to the Mississippi River, Tennessee's western boundary.

During the Civel War, most Tennesseans had little enthusiasm for breaking from a nation whose struggles it had shared for so long. In February 1861, fifty-four percent of the state’s voters voted against sending delegates to a secession convention. With the attack on Fort Sumter in April, however, President Abraham Lincoln called for Tennessee to raise 75,000 volunteers to coerce the seceded states, turning public sentiment dramatically against the Union. In June of 1861, Tennesse became the last state to withdraw from the Union. Many in East Tennessee disagreed and engaged in guerrilla warfare against state authorities by burning bridges, cutting telegraph wires, and spying, and the state government responded by sending Confederate troops to occupy the area.

In 1925, WSM, a Nashville radio station, began broadcasting a weekly program dubbed the “Grand Ole Opry.” Such music came in several forms, such as banjo-and-fiddle bands from Appalachia, family gospel singing groups, and country vaudeville acts. The Opry is still the longest-running radio program in American history, at the time using the new technology of radio to broadcast its “old time” or “hillbilly” music. It was from this that Tennessee emerged as the heartland of traditional country music.

The need to create work during the Great Depression, combined with the desire to bring electricity to rural areas and to control the annual spring floods on the Tennessee River brought about the  Tennessee Valley Authority, the nation's largest public utility, in 1933. The TVA had an impact on the lives of nearly all in Tennessee. Headquartered in Knoxville, it was charged with the task of planning the development of the Tennessee River Valley. It did this primarily by building hydroelectric dams  and coal-fired power plants to produce electricity. Inexpensive and abundant electrical power was the main benefit brought to Tennessee, particularly to rural areas that previously did not have electrical service.

World War II brought relief from the Great Depression to Tennessee by employing ten percent of the state’s populace in the armed services. Most of those who remained on farms and in cities worked on war-related production. Tennesseans participated in all phases of the war, from combat to civilian administration to military research. War industries employed all the available remaining labor force. Especially significant for the war effort was Tennessee’s role in the Manhattan Project.  Research and production work for the first atomic bombs were conducted at the huge scientific/industrial installation at Oak Ridge, Tennessee.