From 1985–89, Taylor established his leadership of the NPFL and prepared his Christmas Eve invasion, which subsequently launched a seven-year civil war. He established NPFL headquarters at Gbarnga, near the Liberian border with Guinea, and consolidated his control over the country. He created a new currency and banking system, developed an international airfield, and reestablished exports of diamonds, gold, rubber, and timber—in effect, he established a country within a country with himself as its warlord.
Throughout the early part of 1990, Taylor had the support not only of the majority of Liberians, but of the United States as well. The United States was a staunch ally, despite legitimate concerns about gross human rights abuses. Taylor appeared to be a preferable alternative to Samuel Doe; he was well-spoken and articulate, repeatedly expressed a commitment to democratic ideals, and stated his intention to hold elections and permit vigorous opposition.
By late July 1990, however, support for Taylor was evaporating both at home and abroad. When his troops entered Monrovia in July, Taylor claimed executive authority, but was immediately challenged by a faction within the NPFL, led by Prince Yormie Johnson. Johnson's troops quickly captured parts of the capital. While Taylor's control over the rest of the country remained unchallenged, he was unable to gain control over Monrovia. The Economic Community of West African States (ECOWAS) repeatedly attempted to negotiate a ceasefire without success, and in late August the ECOWAS Monitoring Group (ECOMOG) was dispatched to enforce peace in the capital. Doe and Johnson had agreed to accept ECOMOG troops but Taylor greeted their arrival with armed opposition.
On 30 August 1990, exiled opposition leaders met in Gambia and elected Amos Sawyer to be the leader of an Interim Government of National Unity. The pitched battle for Monrovia nonetheless continued and on 10 September, after being captured by Johnson's rebels, Samuel Doe was executed.
Taylor rejected the authority of President Sawyer, as well as any proposal that would require power-sharing with the opposition. His tactics for maintaining his position became increasingly brutal as the conflict escalated. Despite numerous ECOWAS-brokered ceasefires, the increasing involvement of ECOMOG troops in the conflict, and a popular desire to end the fighting, Monrovia remained essentially under siege.
Throughout numerous setbacks to peace, the international community insisted upon elections and a reinvigoration of civil society. Only when it became obvious that Taylor would not achieve his objectives militarily did he accept the ballot box alternative.
Presidential and legislative elections were held on 19 July 1997. Taylor transformed the NPFL into the NPP (National Patriotic Party), and orchestrated an effective, well-financed campaign. Weary of war, 85% of registered voters turned out to give Taylor a lop-sided victory. Taylor was officially declared the victor on 24 July with 75% of the vote. The elections were closely monitored by international observers and found to be generally free and fair.