Nicholas II ascended the throne on his father's death in
1894 with the intention of keeping to his father's
conservative policies. This is not surprising, as his main
tutor during childhood had been the very conservative Pobyedonostzev. As
emperor, he tried to force the border areas of
Russia to abandon their own cultures and become Russified; he also wanted to expand Russian territory in
Asia, partially for Russia's glory and also to have more markets for developing Russian
industry. (This eventually led to the
Russo-Japanese War.) Then-Minister of Finance Witte succeeded in modernizing the
economy quite a lot.
Nicholas tended to avoid open arguments and not tell people about things that concerned them until the last possibly moment; he was accused of being devious, but those who knew him say that he was just not very confident and did not want to hear arguments that might make him sound bad. He was very comfortable in his private life, though; the family of his wife, four daughters, and son Alexei were happy together despite their worries about Alexei's hemophilia (inherited from his mother's family).
In 1904 after years of Russia and Japan both trying to take over Manchuria and Korea and the failure of negotiations to divide the area in two, Japan broke off diplomatic relations with Russia and, without declaring war, bottled up the Russian fleet in the harbor of Port Arthur on the Chinese coast. Japan wore several quick victories and esentially destroyed the Russian navy in the area. U.S. President Theodore Roosevelt mediated a peace less than a year after the start of hostilities, but Russia was humiliated. Discontent among Russians grew, and a group of workers who came to give the tsar petitions were fired upon, and this "Bloody Sunday" touched off the Russian Revolution of 1905. Nicholas was forced to agree to a constitution and a representative body, the Duma, but he refused to cooperate with the new parts of government.
For the next nine years, the Emperor and his supporters basically did all they could to keep Imperial power strong and weaken anything to do with the reforms. Nicholas dissolved the first Duma session in 1907 and several others whenever he didn't like what was happening. When World War I broke out in 1914, Russia came together somewhat against Germany and the Central Powers; Nicholas took command of the army and essentially left Empress Alexandra in charge. Both Nicholas and his wife were religious and trusted people who were supposed to have mystical powers; Alexandra particularly trusted Rasputin, a monk who was supposed to be able to cure her son's hemophilia. Rasputin's influence in government became so great that he was assassinated in 1916.
By 1917, Russians were tired of the war, which was making food scarce and not seeming to have any benefits for their country. Soldiers refused to fire on workers striking for more food, and Nicholas was not able to make them obey. He tried to shut down the Duma session then going on, but the members refused to go. Nicholas was forced to abdicate; he had wanted his brother Mikhail to become regent for Nicholas' son Alexei, but Mikhail was smart enough to refuse, and the Duma appointed a provisional government. (See Russian February Revolution of 1917.)
The former Emperor and his family were kept under guard; they had at first wanted to go to England and Nicholas' cousin George V was at first willing to let them come, but English public opinion was such that the invitation had to be retracted. After the Russian October Revolution of 1917 when the provisional government was overthrown by the Bolsheviks, the royal family was held near Ekaterinburg. During the Russian Civil War of 1918-20, the local Bolsheviks feared the anti-revolutionary forces would free the royal family, and all of them were shot on the night of July 16, 1918. (Legend has Alexei or Anastasia, the youngest children, escaping, but no firm proof of this has been found.)
Sources: Donald Raleigh and A.A. Iskenderov's The Emperors and Empresses of Russia: Rediscovering the Romanovs and those listed in Monarchs of Russia.