Unfortunately, shortly after their rise to prominence, the government, acting on the behalf of corporate interests, began engaging in a campaign of repression and persecution of the Wobblies.

The Wobblies were fast becoming a formidable force in the labor movement and they were determined to put an end to it before it was too late. Companies often employed Pinkerton agents or hired goons along with military troops and police provided by government connections as strikebreakers to attack and intimidate striking workers.

In one of the worst of many examples of labor clashes, 250 IWW members from Seattle travelled to Everett, Washington to protest restrictions on free speech and violent attacks on Wobblies by local police during a 1916 strike. Their ferry was met at the dock by the local sheriff and about three hundred deputized strikebreakers. When the Wobblies refused the sheriff's orders to turn back, him and his "deputies" opened fire on the boat. The union members returned fire and the ensuing melee resulted in eleven dead and twenty-seven wounded passengers; plus two dead and twenty-four wounded on shore.

Things got even worse with the onset of the First World War. Opponents took advantage of the IWW's anarchist, socialist, and anti-war beliefs; as well as their close affiliation with immigrants to strike at its membership. Beginning in 1917, IWW union halls throughout the country were raided by Justice Department agents and hundreds of Wobblies were arrested. They were charged with acts in violation of the newly passed Espionage Act including conspiring to hinder the draft, encourage desertion, incite revolution, and intimidate others in connection with labor disputes. The government used wartime hysteria to justify the imprisonment or deportation of thousands of IWW members.

In addition, portrayals of the Wobblies in government and corporate propaganda as "enemy aliens" and traitors for their opposition to American involvement in WWI led to many Wobblies being attacked by vigilante mobs. In Butte, Montana; Frank Little, a member of the IWW General Executive Board, was kidnapped by six masked men and lynched for criticizing the war. Wesley Everest was beaten, castrated, lynched, and shot (the most complicated suicide ever!) in Centralia, Washington by a mob after being arrested following a gunbattle between Wobblies and a group of war veterans, who had attacked the local IWW union hall during an Armistice Day Parade. Many other Wobblies throughout the country were beaten, maimed, or killed by police officials and/or vigilante mobs (often composed of thugs hired by business owners).

However, not all the Wobblies' problems were external. Even as the government was using the public's fear of communism to validate their oppressive actions; the IWW was experiencing its own internal struggle over communism. Historically, divisions had always existed between Communists and Anarchists, the two main groups comprising the IWW, involving statism. While the two groups had, for the most part, been able to coexist prior to WWI, the combination of a lack of leadership, brought about by the government repression. and the success of the Russian Revolution brought those divisions to the forefront.

In 1920, the IWW suspended the Philadelphia Longshoreman's Local no. 8, one of it's largest and most celebrated branches, over false allegations by a communist rival that they had supplied weapons to anti-Bolshevik forces in Europe. Erosion of membership continued in the early 20's as some members began to leave to join communist organizations. Soon, the remaining communist members began pushing for the IWW to align itself with the Red International of Trade Unions (also called the Profintern), a Soviet created organization of worldwide communist labor unions. Anarchist members, who disagreed with communism's statist approach and the abuses under communist rule in Russia, resisted these efforts. Further defections were caused by increases in criticisms of Soviet leaders and policies being printed in the Industrial Worker and other Wobbly publications.

Finally in 1924, there was a rift between Wobblies in the eastern states, who favored centralized control of the union and political involvement, and those in the west, who favored more localized control and organizing on the job. This led to a second union headquarters being set up in Utah and claims from both them and the original in Chicago as the "real-IWW," including two separate IWW union halls in many towns. While the western branch of the IWW had folded by 1930, this split, along with the passage of the Taft-Hartley Act of 1947, which severely restricted the tactics the Wobblies traditionally employed in disputes, contributed to the IWW quickly declining in membership during the next decades. Though they never actually broke up the Wobblies numbers and influence steadily decreased until they became a largely forgotten footnote in labor history. That is until recently, when they have begun to gain ground amongst young politically active workers.