Rumors of a coup began circulating in late summer of 1963. The United States endeavored to make clear its opposition to such action--even dispatching a high-ranking officer from the United States Southern Command in the Panama Canal Zone to try to convince the chief of the armed forces, Air Force Colonel Oswaldo López Arellano, to call off the coup. Villeda Morales also tried to calm military fears, taking the carbines away from the Civil Guard and opposing plans for a constitutional amendment to restore direct command of the military to the president. All these efforts failed, however. Before dawn on October 3, 1963, the military moved to seize power. The president and the PLH's 1963 presidential candidates were flown into exile, Congress was dissolved, the constitution was suspended, and the planned elections were canceled. Colonel López Arellano proclaimed himself president, and the United States promptly broke diplomatic relations.

López Arellano rapidly moved to consolidate his hold on power. Growing radical influence had been one of the reasons advanced to justify the coup; once in power the government disbanded or otherwise attacked communist, pro-Castro, and other elements on the left. The Agrarian Reform Law was effectively nullified, in part by the regime's refusal to appropriate money for the National Agrarian Institute (Instituto Nacional Agrario--INA). The country's two peasant unions were harassed, although a new organization of rural workers, the National Union of Peasants (Unión Nacional de Campensinos--UNC), which had Christian Democratic ties, actually expanded in the mid- and late-1960s. López Arellano promised to call elections for yet another legislature, and early in 1964 his government was recognized by the new United States administration of President Lyndon B. Johnson. Shortly thereafter, military assistance, which had been suspended following the coup, was resumed.