Somoza Debayle runs for and wins presidential elections held in September. On 27 December the Sandinista National Liberation Front (FSLN), an armed Marxist revolutionary organisation named after Augusto César Sandino and operating in rural areas, seize the home of a former government official and take as hostages a handful of leading Nicaraguan officials, many of whom are Somoza relatives.
The guerrilla's prestige soars when they successfully negotiate a US$1 million ransom, have a government declaration read over the radio and printed in La Prensa, and get 14 FSLN prisoners released from jail and flown to Cuba along with the kidnappers. Somoza Debayle responds with further censorship, intimidation, torture and murder.
The FSLN has strong links with the KGB (Komitet Gosudarstvenoi Bezopasnosti - the Soviet secret police force) and the KGB is involved in the planning of most FSLN operations.
Somoza Debayle and the National Guard launch a violent campaign against the FSLN. A state of siege is imposed, the press censored and all opponents threatened with detention and torture. Individuals suspected of collaborating with the FSLN are targeted. The country begins the descent into civil war.
In September, under pressure from the administration of US President Jimmy Carter, Somoza Debayle lifts the state of siege. Antigovernment protests and demonstrations resume. In October a group of prominent Nicaraguan business people and academics known as Los Doce (the Group of Twelve) form an anti-Somoza alliance and establish ties with the FSLN.
On 10 January Pedro Joaquín Chamorro Cardenal, the publisher of the newspaper La Prensa, is assassinated, leading to mass demonstrations against the regime. A nationwide strike begins on 23 January, with participants demanding the end of Somoza Debayle's dictatorship. The National Guard increases repression and Somoza Debayle proclaims his intent to stay on in power until the end of his presidential term in 1981. As the strike wears on over two weeks the FSLN launch a series of attacks throughout the country.
In February the US suspends all military assistance to the regime. Somoza Debayle then turns to the international market to procure arms and equipment, reportedly sourced from Israel, at further cost to an economy already suffering from a flight of capital, lack of investment, inflation and high unemployment. Political opposition to the regime continues to grow. The Broad Opposition Front (FAO) comprising four opposition groups, including Los Doce, is formed in May and tries to reach a negotiated solution with Somoza Debayle.
On 22 August the FSLN takes over the national palace and holds almost 2,000 government officials and members of Congress hostage for two days. In a humiliating defeat that inspires the opposition and demoralises the National Guard, Somoza Debayle is forced to meet most of the rebels demands, including the release of 60 FSLN guerrillas from prison, media dissemination of an FSLN declaration, a US$500,000 ransom, and safe passage for the hostage takers to Panama and Venezuela.
The FSLN is further strengthened in December when Cuban mediation leads to an agreement among the group's three factions for a united Sandinista front. Formal unification of the FSLN occurs in March 1979.
Meanwhile, with the FAO unable to secure a negotiated solution, the insurrection escalates. Further blows to the regime come at the end of the year when the Organisation of American States Inter-American Commission on Human Rights publishes a report accusing the National Guard of numerous violations of human rights and when the United Nations (UN) passes a resolution condemning the Nicaraguan Government.
The FSLN establishes the National Patriotic Front, a coalition supported by Los Doce and elements from the FAO and the business sector, on 1 February.
The battle-readiness of the FSLN forces is meanwhile improved by arms shipments from Venezuela, Panama and Cuba, mostly through Costa Rica.
An offensive launched in May sees the FSLN overcome the National Guard across the country. By the end of June all of Nicaragua is under FSLN control except the capital, where Somoza Debayle remains. Facing certain defeat, Somoza Debayle resigns as president on 17 July and flees to Miami then Paraguay. Many members of the National Guard also flee the country, seeking asylum in neighbouring countries, particularly Honduras and Guatemala.
The FSLN and other members of the revolutionary force enter Managua on 19 July, signalling the end of the war. An estimated 50,000 Nicaraguans have died during the conflict, 120,000 are exiled and 600,000 homeless. The country's economy is in ruins and foreign debt amounts to US$1.6 billion. A five-member junta formed to govern the country initially has the support of most of the population, but as the FSLN works to consolidate its power cracks begin to appear. On 17 September Somoza Debayle is assassinated while in exile in Asunción, Paraquay.