In 1917, a historic decision was made during the Latgalian Congress to secede from the Vitebsk Governorate, so that after 300 years of separation the Latvian people of Latgale would become part of the same nation as those of Kurzeme and Vidzeme by the creation of the common independent state of Latvia.
During the first period of independence, Rēzekne was the centre of the region; its population reached up to 13,300 in 1939. City residents were mostly employed in small factories, trade companies, and the railway sector. During this period, Rēzekne became the cultural centre of the Latgale region.
During World War II, the majority of public and residential buildings were destroyed; after the war almost all of the war-torn city had to be rebuilt. However, some historical buildings from the time can still be seen on Latgales iela, one of the oldest streets in Rēzekne. Next to the Cathedral stands the building, constructed in 1780, that was formerly used by government institutions. Currently, it belongs to the Diocese of Rēzekne-Aglona and houses Rēzekne Catholic Secondary School.
At the turn of the 19th and 20th centuries, one of the characteristics of Rēzekne was buildings made of red bricks. Some of them have survived the turbulent events of the 20th century. These include, among others, the oldest pharmacy of the city, “Ērgļa aptieka” (The Eagle Pharmacy), built in 1882 at Latgales iela 41; the two-story house at Latgales iela 28 that belongs to Rēzekne’s Old Believers Cemetery Community; and the buildings at Atbrīvošanas aleja 92 and 94.
After the end of World War II, Rēzekne began to develop as an important industrial centre of the region. In 1957, the Rēzekne Canned Milk Plant was built, followed by the Rēzekne Milking Equipment Factory five years later; in 1971, the Rēzekne Factory of Electrical Building Equipment launched its first products.