Though he lived until 1970, Sukarno's grip on power had almost completely slipped by the end of 1965, and for the remaining year of his presidency he ruled in name only, as General Suharto manoeuvred himself to the top of the political ladder. Communists throughout the archipelago became the victims of a massive Suharto-led purge, with the slaughter of communist sympathizers continuing until the early months of 1966. It was the bloodiest episode in Indonesia's history: most experts today reckon that at least 500,000 people lost their lives, although the official figure was a more modest 160,000. The army was now the dominant force in Indonesian politics.

On returning to power, Sukarno tried desperately to weaken the power of the armed forces but Suharto's response was to encourage a renewed outbreak of violence. On March 11, 1966, Sukarno was informed that unidentified troops were surrounding his palace, and in panic he fled to Bogor. Once there, Sukarno was persuaded to give Suharto full authority to restore order and protect the president by whatever means necessary.

The following year, pro-Suharto Adam Malik was made minister for foreign affairs, and quickly set about restoring relations with the West and loosening existing ties with communist China. Soon aid began pouring back into Indonesia, rescuing the ailing economy and providing essential relief to thousands of the poorest in Indonesian society. Suharto now had popular support to go with his burgeoning political power and, in the new bourgeoisie, he found a powerful and secure foundation for his regime. On March 12, 1967, Sukarno was stripped of all his powers and Suharto was named acting president .