After the rise of Moscow, its grand prince came to be called czar. In 1547, Ivan IV, also known as Ivan the Terrible, became the first ruler to be crowned czar. Ivan made the power of the czar over all Russia complete.

Ivan was brutal, extremely suspicious, and perhaps, at times, insane. He formed a special police force and began a reign of terror in which he ordered the arrest and murder of hundreds of aristocrats. Ivan gave his victims' estates as payment to the service gentry (landowners serving in the army and government). He also established strict rules concerning the number of warriors and horses each landowner had to supply to the army. Ivan burned many towns and villages, and he killed church leaders who opposed him. In a fit of rage, Ivan even struck and killed his oldest son.

The number of service gentry increased rapidly. But their estates had no value unless the peasants remained on the land and farmed it. Ivan and later czars passed a series of laws that bound the peasants to the land as serfs. Serfdom became the economic basis of Russian power. The development of Russian serfdom differed sharply from changes occurring in Western Europe at the time. There, during the Renaissance, the growth of trade led to the use of money as royal payment. It also led to the disappearance of serfdom in Western Europe.

Ivan fought Tatars (Mongols) at Astrakhan and Kazan to the southeast, and he won their lands. Russian forces then crossed the Ural Mountains and conquered western Siberia. Ivan also tried to win lands northwest to the Baltic Sea, but he was defeated by Lithuanian, Polish, and Swedish armies.