Its headquarters, under Georgi Dimitrov and Vassil Kolarov, was stationed in North-Western Bulgaria, where the struggle was fought on the largest scale and for longest. In Southern Bulgaria, insurgents took the town of Nova Zagora. Workers' and peasant rule was established in many towns and villages. The uprising, however, was crushed in blood: 20,000 Communists and Agrarians were killed and tens of thousands were imprisoned or fled the country. Fascist dictatorship was established in the country.

The Communist Party was banned and for the following twenty years continued the struggle underground. The Communist Party sustained a particularly heavy blow in 1925 when many of its cadres and progressive intellectuals were put to death without trial.

In the context of the ensuing relative stabilization of capitalism, industrial and agricultural output caught up with and outstripped pre-war levels. The process of the centralization of industrial and financial capital (nine financial-industrial associations ran the entire Bulgarian economy) continued.

The foreign policy of Bulgaria in the late '20s and until the beginning of World War II was one of cautiously awaiting a propitious time for the revision of the Neuilly Peace Treaty. An attempt was made by all governments to maintain good relations with their neighbours and the Great Powers. In the early '30s, the neo-fascist bourgeois and petty bourgeois parties (the Democratic, the Liberal and the Radical) stepped up their activities, won the elections and put in the Popular Alliance cabinet. In 1934 it was removed from power by a military coup d'etat. The new cabinet of Kimon Georgiev established diplomatic relations with the Soviet Union, and attempted to orient the country towards France. Having been in power only for a year this cabinet attempted to institute an elitarian regime in which the King played an inferior role. This speeded the transition to an the open dictatorship.