The Treaty of Versailles, signed in 1919, was significant in shaping post-World War I Europe as it imposed harsh reparations and territorial losses on Germany. The treaty aimed to prevent future conflicts through collective security measures and redrawing European borders. However, the punitive nature of the treaty, including the War Guilt Clause and disarmament stipulations, fostered economic instability and resentment in Germany, contributing to the rise of Nazism and ultimately leading to World War II.