The Croatian Revolutionary Organization (Ustaša—hrvatska revolucionarna organizacija—UHRO), as the Ustasha movement was originally known, was created sometime in late 1929 or early 1930 from among radical student clubs and militant youth activists within the nationalist Croatian Party of Right (Hrvatska stranka prava). The UHRO was formed jointly under the leadership of Gustav Perčec, a Zagreb journalist, and Ante Pavelić, a lawyer and parliamentary deputy for the Croatian Party of Right. The ostensible catalyst for the founding of the organization was the fatal shooting in June 1928 in the Yugoslav parliament of Stjepan Radić, the leader of the Croatian Peasant Party (Hrvatska seljačka stranka—HSS), the largest and most popular political party in Croatia, and the subsequent establishment of a royal dictatorship under King Aleksandar, which created a centralized synthetic Yugoslav state. However, while Pavelić, Perčec, and other leaders of the embryonic Ustasha movement would later claim that Radić's assassination, which provoked violent student protests on the streets of Zagreb, represented a turning point, convincing them that an independent Croatian state could be achieved only through violence, in the late 1920s the Croatian Party of Right had already created a number of paramilitary student and youth groups that in their underground newspapers and journals boasted of their preparations for a “final confrontation” and violent insurrection against Belgrade. The UHRO was not the first insurrectionary anti-Yugoslav movement to be formed in Croatia. Immediately following the establishment of the new Yugoslav state in December 1918, embittered emigres, led by Ivica Frank and Captain Josip Metzger, had formed a paramilitary organization, the Croatian Legion, in Graz, Austria. Claiming thousands of young and able members, they vowed on their return to exact a terrible revenge on the Serbs and fry them in “boiling oil.” Nevertheless, the UHRO was certainly the most significant.

After the founding of the UHRO and the formal decision to struggle for the “liberation” of Croatia through violence, Pavelić and his followers fled abroad where they established training camps in sympathetic “revisionist” states such as Fascist Italy and Hungary.