On the 28th June 1914, Heir to Austrian Throne, Franz Ferdinand, is killed in Sarajevo by a Serbian nationalist.
War broke out in August, but tension had been building in Europe since 1900. These are the main causes that explain why the war started:

• MILITARISM. There was a naval rivalry between Germany and UK. Germany was competing with Britain to build battleships and to control trade routes. Germany was also competing with France and Russia to expand their armies. This lead to an arms race (“Armed peace”) in which each country tried to have a better military machine than their enemy, spending huge amounts of money on manufacturing new weapons.

• INTERNATIONAL ALLIANCES. Between 1900 and 1914, European countries became suspicious of each other. France and Britain were afraid of the Kaiser’s ambition to build a large German empire (Weltpolitik). Each of the great powers realized that if there was a war, they would need friends and allies. Two alliances were formed: the Triple Alliance (Germany, Austria-Hungary and Italy) and the Triple Entente (Britain, France and Russia).

• IMPERIALISM. All the great powers were competing for colonies. But German attempts to gain colonies (colonial crisis in Morocco in 1905 and 1911) frightened and annoyed France and Britain.

• NATIONALISM. France lost Alsace and Lorraine in 1871 (Franco-Prussian War). French wanted to take revenge on Germany. 
Austria and Russia were competing to have more influence in the Balkans. This region was the centre of major international tensions. Slavs, aided by Russia and Serbia, wanted to be free of Austrian rule (Bosnia was occupied by Austria in 1908). Serbia wanted to create a large country including Bosnians, Croatians and Slovenians and had the support of Russia. This led to a big tension between Russia and Austria. 
The two Balkan wars (1912 and 1913): in the first one, Serbia, Bulgaria, Greece and Montenegro defeated the Ottoman empire. In the second, Bulgaria and Serbia fought for dominance in the region, and Serbia emerged as the victor. 
As Serbia was becoming stronger, Austria-Hungary looked for support from Germany, while Serbia allied with Russia.

When Franz Ferdinand is assassinated, Austria blames Serbia for supporting terrorists. With the mechanism of Alliances, war would start soon. Austria declared war to Serbia, so Russia declared war to Austria. Germany declared war on Russia and France. Britain declared war on Germany after it invaded Belgium to attack the French.