With his power secure and with the support of Japan, Yuan considered a revival of the monarchy, with himself as Emperor. He reasoned that the Chinese masses had long been used to autocratic rule, and that the Republic had only been effective as a transitional phase to end Manchu rule. Further, China's political situation demanded the stability that only a monarchy could ensure. American political scientist Frank Johnson Goodnow and Japanese negotiators concurred (perhaps one of the rewards for Yuan's support of the Twenty-One Demands). 

In 20 November 1915, a "Representative Assembly" voted unanimously in favor of his becoming emperor. On 12 December 1915, Yuan proclaimed himself Emperor of China with the reign title of Hongxian (洪憲; i.e. Constitutional Abundance). The new Empire of China was to formally begin on 1 January 1916, when Yuan intended to conduct the accession rites. 

Yuan expected widespread domestic and international support for his reign. However, he and his supporters had badly miscalculated. Many of Yuan's closest supporters abandoned him, and the solidarity of Yuan's Beiyang clique of military protégés dissolved. There were open protests throughout China denouncing Yuan. International governments, including Japan’s, proved suddenly indifferent or openly hostile to him, not giving him the recognition anticipated. Sun Yat-sen, who had fled to Tokyo and set up a base there, actively organized efforts to overthrow Yuan. Yuan's sons publicly fought over the title of "Crown Prince," and his former loyal subordinates like Duan Qirui and Xu Shichang left him to create their own factions. Faced with widespread opposition, Yuan repeatedly delayed the accession rites in order to appease his foes, but his prestige was irreparably damaged and province after province voiced disapproval. 

On 25 December 1915, Yunnan's military governor rebelled; the governor of Guizhou followed in January 1916, and Guangxi declared independence in March. Funding for Yuan's accession ceremony was cut on 1 March, and he formally abandoned the empire on 22 March after 83 days. This was not enough for his enemies, who called for his resignation as President. More provinces rebelled until Yuan died from uremia on 5 June 1916, at the age of fifty-six.