Operation 1027 had already reshaped northern Myanmar's map. During its first phase in late 2023, resistance forces seized Hsenwi, Namtu, Kutkai, and eventually Laukkai, the capital of the Kokang region. China brokered a ceasefire that paused the offensive, but the pause did not hold. In late June 2024, the Ta'ang National Liberation Army launched fresh attacks, citing junta ceasefire violations. They captured Kyaukme and Nawnghkio, the last towns on the road between Lashio and Mandalay, completing the encirclement. On 2 July, the Myanmar National Democratic Alliance Army joined the fight. The junta responded with airstrikes and indiscriminate shelling of the city's outskirts. Families of soldiers were evacuated. Thousands of civilians fled. Those who could not leave hunkered down as artillery thundered from the surrounding hills.

Resistance fighters entered Lashio on 6 July, using drones and artillery to strike the junta's headquarters compound. The MNDAA briefly paused operations on 14 July to avoid interference with a Chinese Communist Party plenary session -- a detail that revealed how closely Beijing's political calendar constrained the conflict. Fighting resumed quickly. By 23 July, rebels had captured the 68th Infantry Regiment and taken 317 prisoners of war, including a lieutenant colonel, two majors, and five captains. On 25 July, the MNDAA claimed the Northeastern Regional Military Command headquarters, though the junta denied it. The next day, junta officials were ordered to leave. Clashes raged around Lashio Motel, Lashio University, and Mansu Pagoda. The MNDAA captured the 41st Battalion Base, the 902nd Engineering Battalion, Lashio Hospital, Ava Bank, and Lashio Airport in rapid succession. On 28 July, rebels freed 200 political prisoners from Lashio prison, including the detained politician Tun Tun Hein.

On 30 July, the MNDAA ambushed a junta resupply convoy from Tangyan, reportedly killing more than 50 soldiers. By 1 August, only about 400 junta troops remained in the Northeastern Command headquarters. That evening, the Myanmar Air Force struck a hospital under MNDAA control in Laukkai, killing 10 people. The next day brought the battle's darkest episode: rebel forces stormed the military hospital in Lashio. Reports emerged of a massacre -- over 100 people killed, including children, medical staff, and patients who had stayed after the fighting subsided. The accounts remain unconfirmed, but they cast a shadow over the rebel victory. On 3 August, MNDAA fighters entered the Northeast Command headquarters and raised their flag. The last junta holdouts in the city were defeated that morning. During the battle, the MNDAA destroyed two WMA-301 assault guns and two BTR-3 infantry fighting vehicles.

Lashio's fall severed the junta's communication with its forces further north, a blow that analysts called devastating. Nathan Ruser of the Australian Strategic Policy Institute assessed that the capture "basically eliminates the junta as an effective organized force from a huge part of the country." The United Wa State Army, Myanmar's most powerful ethnic army, deployed fighters to protect its offices in the township but declared strict neutrality. Twenty percent of Lashio's civilian population remained trapped during the fighting before humanitarian corridors were opened. The victory, however, did not last. In April 2025, under heavy diplomatic and economic pressure from Beijing, the MNDAA withdrew from Lashio as part of a Chinese-brokered ceasefire. By 21 April, the city had partially returned to junta control without further fighting, though the outskirts remained in insurgent hands -- a compromise that left the city's future as uncertain as the country's.