The Federated Suns was founded in 2317 by Lucien Davion, Prime Minister of New Avalon, when he negotiated a mutual defense and assistance agreement, known as the Crucis Pact, with 20 nearby star systems. Lucien became the federation's first president and New Avalon its capital. A member of the Davion family has led the Federated Suns in unbroken succession for the past 700 years. Presently on the throne is Victor Steiner-Davion, son to Hanse Davion and Melissa Steiner, whose marriage effectively sealed the Federated Suns' alliance with the Lyran Commonwealth. The Federated Suns claim approximately 400 inhabited star systems under its aegis, nearly double the number of worlds controlled at the beginning of the Succession Wars. In addition, uncounted other worlds are claimed and exploited by Davion forces.

Much of House Davion's growth over the past 200 years has taken place at the expense of Liao's Capellan Confederation. This was particularly true at the end of the Fourth Succession War, when the Federated Suns took more than 100 worlds from House Liao.

An even more serious enemy to the Federated Suns has been the Draconis Combine, ruled by House Kurita, which nearly succeeded in conquering the Davion realm during the First Succession War. By forging an alliance with the Lyran Commonwealth in 3022, Davion forced Kurita to spread its 'Mech resources along two frontiers, leaving many worlds thinly defended. Prior to the Fourth Succession War, Davion forces were able to exploit this vulnerability, seizing the Combine worlds of Tancredi II and Galatea, as well as Star League storehouses at Galtor and Rowe, while losing very few units themselves. With the outbreak of war, however, the Federated Commonwealth had to rearrange its priorities. By the end of the Fourth War, House Kurita had managed to seize 15 worlds, including Galtor, along its border with House Davion.