After 16 years of Soviet occupation and communist rule, life was markedly worse in the eastern zone of Berlin and the rest of the country in general. The Soviet Army had stolen pretty much anything that was not nailed down as war reparations, and much of the original war damage had not yet been repaired.
By contrast, in West Berlin/West Germany, an economic miracle recovery had taken place, in no small part because of the Marshall Plan, and the economy was booming. The division of Berlin and Germany had also split some families for years and that was a great incentive for escape.
Tens of thousands of Berliners had done just that, crossing the wire, minefields, risking death or imprisonment along the way. So the Soviets and the East German government decided to make it much more difficult, and constructed the entire wall in about 24 hours. It took everyone by surprise.
In August of 1961 the Berlin Wall was constructed to keep the East Berliners from escaping the Soviet Occupation Zone and going into West Germany which was occupied by other Germans as well as Americans, British, and French.
As people became disillusioned with Communism and the economic and political state became increasingly oppressive, many people sought to escape. By 1961 an approximate 1500 people a day were defecting from Communist Germany. So, the Soviets had the concrete wall dividing the country constructed. In just 24 hours streets were torn up, subways, etc. blocked and a barracades of paving stones were constructed. No longer were the 60,000 commuters allowed to travel, either.
Since the first "wall" was mostly barbed wire, another real wall was constructed in 1962 and a space left between the wire fence and the new wall. This space contained gravel which would display footprints. In addition, mines were placed in this area and guards were instructed to shoot whoever was seen there.
In 1989 there were many student protests, and with the fall of the Iron Curtain, President Ronald Reagan called upon Premier Gorbechev to "tear down this wall." On October 3, 1990, the reunification of Germany became official, and Berliners claimed pieces of the wall for themselves. Remnants of the wall can be seen in local museums.