When Zeon Zum Deikun, the leader of the Republic, became gravely ill in UC 0068, he mentioned only one name on his deathbed: "Degwin Zabi." The people of Side 3 took this to mean that Deikun was naming Degwin to succeed him as leader of the Republic in that year. After being appointed as the leader of the Republic of Zeon, Degwin Zabi adopted the title of Sodo, meaning "Lord," and was referred to from them on as Degwin Sodo Zabi. Seizing control of the government, Degwin maintained the only way for the colonies to be independent of the Earth Federation was for the Principality to fight (though in reality, Side 3 was already independent of Earth at that time). To this end, Degwin appointed his children into military and political offices and pushed for rapid development of military technology. Gihren Zabi, the eldest of the Zabi children, remained at his father's side as his aide, achieving Admiral's rank and eventually became the Supreme Commander of the Zeon Armed Forces in place of his father. Dozle Zabi, the second eldest son of the Zabi family, became Vice-Admiral and the Commander of the Space Attack Force, responsible for overseeing fleet movements within the Principality and for securing territory. Kycilia Zabi, a Rear Admiral, shared command of the Zeon Space Attack Force with her brother Dozle, which led to conflicts between the two as she operated from the lunar city of Granada. Garma Zabi, the youngest of the Zabi family, was placed in command of the Zeon Earth Attack Force. With the backing of the Principality of Zeon's new leadership, technological breakthroughs were made in many fields of research. One of the largest developments was that of mobile suit technology, which initially intended for colony construction found military applications. Research by Doctor Minovsky led to the discovery of the Minovsky Particle and the Minovsky Particle Effect, which allowed for the development of further technology, such as the Minovsky Craft System. Supported by Kycilia Zabi, research into the growing phenomenon led to the classification and discovery of Newtypes, and with it her support of the development of Newtype-based military units. Negotiations with the Earth Federation finally broke down in UC 0079, leading to the Principality of Zeon (re)declaring its independence from the Earth Federation and at the same time declaring war on the Federation.
One of the first groups of colonies to be drawn into the conflict were the colonies located at Side 1, also called Zarn, which served as the capital of the Earth Federation in space. The group of colonies at Side 2 (known as Hatte) and Side 4 (known as Moore) were drawn into the conflict as well, with one of the devastated colonies from either Side 2 or Side 4 being used for "Operation British," which was to use a colony as a weapon by sending it on a collision course with Earth. Operation British met with moderate success, as an explosion caused the colony to alter its trajectory. Instead of impacting the Federation's Earth-based capital, it instead landed on Sydney, Australia, destroying 16% of the continent. While attempting to gain another colony to drop onto the Earth, the Earth Federation Space Forces intercepted the Zeon Space Attack Force at Side 5 (also known as Loum), resulting in the "Battle of Loum." The resulting battle employed both nuclear and biological weapons, destroying Side 5 as both forces attempted to bring a quick end to the war.
With the signing of the Antarctic Treaty, the war between the Earth Federation and the Principality of Zeon entered a new phase. Knowing that they could not continue the war without resources, Zeon organized an assault force to invade Earth and secure resources for the war effort. Garma Zabi, the youngest child of Degwin Zabi, was named Commander of the Zeon Earth Attack Force and descended to Earth with mobile suits. The Earth's invasion proceeded quickly due to the Earth Federation Forces being ill-equipped to deal with the new threat of the Zeon mobile suits. The Principality captured a large number of territories and set up mining operations and bases to transport materials back to the homeland as a result. The Zeon Earth Attack Force's base of operations was the captured California Base of the Earth Federation. However, the Federation was able to develop new tactics in dealing with mobile suits, which with the aid of the Antarctic Treaty and the return of General Revil, led to a stalemate in the war as both sides worked to replenish their resources. The Earth Federation gained a morale boost due to Revil's speech "Zeon is Exhausted!". However, even with the war at a stalemate, a Zeon victory seemed inevitable due to the high-quality mobile suits produced for both land and space forces.