From 1945 to 1992, Montenegro became a constituent republic of the Socialist Federal Republic of Yugoslavia; it was the smallest republic in the federation and had the lowest population. Montenegro became economically stronger than ever, since it gained help from federal funds as an under-developed Republic, and it became a tourist destination as well. After war years proved turbulent and were marked by political eliminations. Krsto Zrnov Popović, the leader of Greens was assassinated in 1947, and 10 years later, in 1957, the last Montenegrin Chetnik Vladimir Šipčić was also murdered. During this period Montenegrin Communists such as Veljko Vlahović, Svetozar Vukmanović-Tempo, Vladimir Popović and Jovo Kapicić held key positions in the federal government of Yugoslavia. In 1948 Yugoslavia faced the Tito–Stalin split, a period of high tensions between Yugoslavia and the USSR caused by disagreements about each country's influences on its neighbours, and the resolution of Informbiro. Political turmoil began within both the communist party and the nation. Pro-Soviet communists faced prosecution and imprisonment in various prisons across Yugoslavia, notably Goli Otok. Many Montenegrins, due to their traditional allegiance with Russia, declared themselves as Soviet-orientated. This political split in the communist party saw the downfall of many important communist leaders, including Montenegrins Arso Jovanović and Vlado Dapčević. Many of the people imprisoned during this period, regardless of nationality, were innocent – this was later recognised by the Yugoslav government. 1954 saw the expulsion of prominent Montenegrin politician Milovan Đilas from the communist party for criticising party leaders for forming a "new ruling class" within, Yugoslavia along with Peko Dapčević.

Through the second half of the 1940s and the whole of the 1950s, the country underwent infrastructural rejuvenation thanks to federal funding. Montenegro's historic capital Cetinje was replaced with Podgorica, which in the inter-war period became the biggest city in the Republic – although it was practically in ruins due to heavy bombing in the last stages of WW II. Podgorica had a more favorable geographical position within Montenegro, and in 1947 the seat of the Republic was moved to the city, now named Titograd in honor to Marshal Tito. Cetinje received the title of 'hero city' within Yugoslavia. Youth work actions built a railway between the two biggest cities of Titograd and Nikšić, as well as an embankment over Skadar lake linking the capital with the major port of Bar. The port of Bar was also rebuilt after being mined during the German retreat in 1944. Other ports that faced infrastructural improvement were Kotor, Risan and Tivat. In 1947 Jugopetrol Kotor was founded. Montenegro's industrialisation was demonstrated through the founding of the electronic company Obod in Cetinje, a steel mill and Trebjesa brewery in Nikšić, and the Podgorica Aluminium Plant in 1969.