Religious segregation was the rule, with most states maintaining an official religion. An exception was Prussia, whose rulers were among the first to appreciate the economic benefits of religious toleration. They gladly accepted not only tens of thousands of fellow Calvinists who had been expelled from France and Salzburg, but also welcomed Lutherans, Catholics, and Jews. Joseph II of Austria issued an edict of toleration for all non-Catholic Christians in 1781 and a similar decree for Jews the next year. Assimilation was especially important to the emperor, however, and he attempted to put loyalty to the state above particular religious devotions. He tried to force all Jewish subjects except rabbis to abandon their traditional clothing; he also halted all synagogue construction and required Jews to pay a toleration tax. These Austrian and Prussian examples of toleration were followed reluctantly by Bavaria and Württemberg in 1803, Baden in 1818, Hesse in 1831, and Saxony in 1841.

During the Age of Enlightenment, the writings of the French philosophes were undeniably influential in Germany. The belief in representative government, or government by all people instead of merely the nobility, began to gain popularity. The philosophes also placed great importance on the discovery of truth by the use of individual human reason and through the observation of nature, instead of by the study of authoritative sources such as Aristotle and the Bible.

The spirit of critical and objective inquiry, universal in literate Europe in the 18th century, produced several remarkable German philosophers, including Gottfried Wilhelm Leibniz and Immanuel Kant. Educational reforms led to the establishment of mandatory grammar schools for girls and boys. By the end of the century at least half of the population had some formal schooling. The number of German newspapers increased from 57 in 1700 to almost 200 in 1800. Encarta