Events of 1917 proved decisive in ending the war, although their effects were not fully felt until 1918.

The British naval blockade began to have a serious impact on Germany. In response, in February 1917, the German General Staff convinced Chancellor Theobald von Bethmann Hollweg to declare unrestricted submarine warfare, with the goal of starving Britain out of the war. Tonnage sunk rose above 500,000 tons per month from February to July. It peaked at 860,000 tons in April. After July, the newly re-introduced convoy system became extremely effective in reducing the U-boat threat. Britain was safe from starvation and German industrial output fell.

On 3 May 1917, during the Nivelle Offensive, the weary French 2nd Colonial Division, veterans of the Battle of Verdun, refused their orders, arriving drunk and without their weapons. Their officers lacked the means to punish an entire division, and harsh measures were not immediately implemented. Then, mutinies afflicted an additional 54 French divisions and saw 20,000 men desert. The other Allied forces attacked but sustained tremendous casualties. However, appeals to patriotism and duty, as well as mass arrests and trials, encouraged the soldiers to return to defend their trenches, although the French soldiers refused to participate in further offensive action. Robert Nivelle was removed from command by 15 May, replaced by General Philippe P├ętain, who suspended bloody large-scale attacks.

The victory of Austria–Hungary and Germany at the Battle of Caporetto led the Allies at the Rapallo Conference to form the Supreme War Council to coordinate planning. Previously, British and French armies had operated under separate commands.

In December, the Central Powers signed an armistice with Russia. This released troops for use in the west. Ironically, German troop transfers could have been greater if their territorial acquisitions had not been so dramatic. With German reinforcements and new American troops pouring in, the outcome was to be decided on the Western front. The Central Powers knew that they could not win a protracted war, but they held high hopes for success based on a final quick offensive. Furthermore, the leaders of the Central Powers and the Allies became increasingly fearful of social unrest and revolution in Europe. Thus, both sides urgently sought a decisive victory.