Ethnic Serbs are by far the largest minority and, together with the Roma, face the most discrimination and exclusion. According to the 2001 census, they number 201,631 and make up 4.5 per cent of the population. The results of the census underestimate the number of ethnic Serbs partly because many ethnic Serbs were outside the country at the time of the census, including refugees who intended to return, and partly because some people may have been afraid to declare their ethnicity. The Serb population decreased sharply from 12.2 per cent in the 1991 census, mainly as a direct result of the war. Ethnic Serbs speak Serbian and Croatian, and use the Latin and Cyrillic alphabets. Most Serbs are Christian Orthodox.
Serbs originally moved into the territory of modern-day Croatia as border guards during the period of Habsburg rule, and they were settled in the Military Frontier (Vojna Krajina). After the final abolition of the frontier in the late nineteenth century, Serbs were placed under the authority of the civilian government of Croatia, which until 1918 remained part of the Habsburg Empire. During World War II, the fascist Ustasa government of Croatia slaughtered tens and probably hundreds of thousands of Serbs, Roma, and Jews at the Jasenovac and other concentration camps in a campaign of genocide.
Relations between Serbs and Croats deteriorated rapidly in 1991. The establishment of independent Croatia was combined with a purge of Serbs from the bureaucracy and the police force. The removal of Serb constitutive nation status from the 1990 Constitution and the adoption of nationalist insignia that recalled Ustasa emblems created further tensions. Serb fears for their future in an independent Croatian state were exploited by the nationalist leadership in Belgrade and hastened the process of territorial secession and of civil war. Part of the Serb minority, backed by the Yugoslav Army, declared an independent Republika Srpska Krajina, which at one time occupied 30 per cent of Croatia's territory. Heavy fighting followed with loss of life and massive displacement of people. In 1995, tens of thousands of Serbs were displaced, most to Serbia or Bosnia and Hercegovina, when the Croatian army retook territory occupied by Serb forces. Whether the bulk of these displaced persons were driven from their homes, or left prior to the attacks at the encouragement of Serb leaders remains a matter of dispute. Forthcoming war crimes trials at the ICTY in The Hague are expected to fully air the issue.
Between 300,000 and 350,000 Serbs were displaced as a result of the 1991-1995 war. The majority have not returned, and of those who have returned only 60-65 per cent have stayed. Lack of conditions for sustainable return is a key problem facing the Serbian community today. Serbs are discriminated against in public-sector employment, including in the judiciary and state administration. They also experience difficulty in gaining access to justice, particularly in relation to property and acquired rights, ethnic bias in prosecution for war crimes, problems with education, language use at the local level, and ethnically-based intimidation.
In 2005, the Republic of Croatia ratified a bilateral agreement with Serbia and Montenegro (then still a single country) on the protection of the Serbian/Montenegrin national minority in the Republic of Croatia and the Croatian national minority in Serbia and Montenegro.