Charlemagne continued the policy of his father, King Pepin the Short, of supporting the papacy against the Lombards (Italians in the region around Rome) and of granting the papal state land around Rome as a Frankish fiefdom. Charlemagne defended the election of Pope Leo III against enemies who wanted to reject him on the grounds he was not an aristocrat. Two days after his consecration as pope, Leo crowned Charlemagne as the Holy Roman Emperor.
This was important for several reasons. First, it signaled the importance of the political alliance between the pope and the Franks (French), showing that the papal states and the Frankish states were a powerful European bloc with wealth, military might, and the special imprimatur of holy legitimacy. Second, for the first time since the fall of Roman Empire, a Western monarch was named Roman Emperor. While this was a symbolic title, as Charlemagne ruled only a tiny fraction of the former Roman Empire, it added to his status and showed the growing extent of his power. The ability to name a ruler emperor also showed that Europe was beginning to coalesce into larger states and reestablish at least a small part of the stability that had once characterized the Roman Empire.
Further, the Eastern Orthodox Church in Constantinople was upset and disapproving of the alliance between Leo III and Charlemagne, as was Empress Irene of Athens, who thought the Eastern Roman Empire should be the protector on the Roman church, not the Franks. However, her government was too weak and corrupt to provide Leo III the support he needed.
The coronation of Charlemange by the Roman pope showed the ascendant power of Western Europe and the decline of the Eastern Roman Empire. It also signaled the the pope would become an important player in legitimizing the rule of monarchs in Western Europe.