This chapter examines the Italian occupation between June 1940 and November 1942. Despite covering only a small area of territory, the Italian government saw the occupation as essential to its policy of prestige. Rome, therefore, sought to impose Italianisation, seeing its occupation zone as an opportunity for annexation by stealth. The Italian occupation was thus more akin to the German treatment of Alsace-Lorraine or northern France than the wider German zone of occupation. Defending French territorial integrity was at the heart of Vichy’s claim to legitimacy. However, the French government’s political choices ultimately determined its response. Vichy’s decision to prioritise collaboration with Berlin over objecting to the German annexation of Alsace-Lorraine constrained its ability to oppose similar developments in the Italian zone of occupation. Vichy, therefore, consigned itself to accepting ‘relative’ sovereignty over French territory. In so doing, it experienced further humiliation in failing to prevent de facto territorial annexation by an Italian army whose claims of victory it rejected.