In 1945, in addition to his role as Bishop of St. Augustine, Hurley made a return to the papal diplomatic service and was appointed by Pius XII as regent "ad interim" to Yugoslavia. He thus became the first American to be raised to the equivalent rank of a nuncio. Relations between the Vatican and Yugoslavia had been deteriorating following the end of the war; the new communist government had been accused of murdering priests and the Church was charged with "obstructionist" activity. During his five years in Yugoslavia, Hurley negotiated with Marshal Josip Broz Tito and worked closely with U.S. officials. In 1946, he represented Pius XII at the show trial of Archbishop Aloysius Stepinac by Marshal Tito for "crimes against the people." However, his relationship with Pius became strained after Hurley expressed his opposition to both the Vatican's policy towards Marshal Tito and to the removal of Archbishop Stepinac from his post in Croatia.