In September 1974 the Derg deposed Haile Selassie, who died in custody the next year. The new regime declared a socialist state and nationalised land and industry.

Mengistu Haile Mariam consolidated power and launched the Red Terror (1976–78) against opponents. Ethiopia fought Somalia in the Ogaden War of 1977–78, and long insurgencies continued in Eritrea and Tigray.

Drought and war combined in the famine of 1983–85. Opposition forces advanced through the late 1980s, and in May 1991 the EPRDF entered Addis Ababa as Mengistu fled.