The US, North Vietnam, South Vietnam and the Viet Cong at last signed the Paris Accords on January 27, 1973, and a ceasefire was established. In April 1974, a coalition government was formed, with Souvannaphouma as prime minister and Souphanouvong heading the National Political Consultative Council.

When Phnom Penh and then Saigon fell to communist forces in April 1975, a complete communist takeover in Laos appeared inevitable. "Liberating" towns as they went, Pathet Lao forces reached Vientiane on August 23. On December 2, 1975, the Lao People's Democratic Republic was proclaimed and the abdication of King Sisavang Vatthana accepted. Kaysone was named prime minister, and Souphanouvong president.

Although the Pathet Lao took power in a bloodless coup, they sent as many as fifty thousand royalists to re-education camps , which turned out to be malaria-ridden labour camps. On their release, many lowland Lao left the country, and by the mid-1980s Laos had lost ten percent of its population - including an overwhelming majority of its educated class. The communist government, fearful that the populace would rally around the dethroned king, arrested him and the royal family in 1977 and exiled them to a cave in Houa Phan province near the Vietnamese border where they died of hunger and exposure - effectively extinguishing the centuries-old Lao monarchy.

The new government took over a country stripped of resources, and with an economy in shambles. Intent on ushering in a socialist state, the Pathet Lao followed Eastern bloc models , collectivizing farms, centralizing control of prices and nationalizing what little industry there was. Long-haired teenagers were obliged to get haircuts, women had to wear traditional skirts, and prostitutes and petty thieves were shipped off to re-education camps. Gradually a less rigid form of socialism was adopted, but Laos remained one of the world's poorest countries, with a per capita income of $100.