In March 1988, the EPLF initiated one of its most successful military campaigns by striking at Ethiopian army positions on the Nakfa front north of the town of Afabet, where the Derg had established a base for a new attack against the insurgents. In two days of fighting, the Eritrean rebels annihilated three Ethiopian army divisions, killing or capturing at least 18,000 government troops and seizing large amounts of equipment, including armor and artillery. Subsequently, the town of Afabet, with its military stores, fell to the EPLF, which then threatened all remaining Ethiopian military concentrations in northern Eritrea.

The Ethiopian army's defeat in Eritrea came after setbacks during the preceding week in Tigray. Using the same tactics employed by the EPLF, the TPLF preempted a pending Ethiopian offensive in Tigray with a series of attacks on government positions there in early March. A government attack against central Tigray failed disastrously, with four Ethiopian army divisions reportedly destroyed and most of their equipment captured. In early April, the TPLF took the town of Adigrat in northern Tigray, cutting the main road link between Addis Ababa and Eritrea.

The March 1988 defeats of the Ethiopian army were catastrophic in terms of their magnitude and crippling in their effect on government strategy in Eritrea and Tigray. The capability of government forces in both regions collapsed as a result. Subsequently, Ethiopian government control of Eritrea was limited to the Keren-Asmera-Mitsiwa triangle and the port of Aseb to the southeast. The TPLF's victories in Tigray ultimately led to its total conquest by the rebels and the expansion of the insurgency into Gonder, Welo, and even parts of Shewa the following year.

Data as of 1991