Anti-Sandinista exile groups, backed by the United States Central Intelligence Agency (CIA) soon after their formation, began in the spring of 1981 to plan paramilitary operations against the government of Nicaragua. A year later, a new civil war was well under way. Together referred to as the Nicaraguan Resistance, the two main antigovernment organizations were the Nicaraguan Democratic Force (Fuerza Democrática Nicaragüense-- FDN) and the Revolutionary Democratic Alliance (Alianza Revolucionaria Democrtica--Arde). Based in Honduras, the FDN consisted largely of former members and officers of the National Guard in alliance with other groups, deserters from the FSLN militia, and disgruntled Miskito. According to a 1985 United States Congressional study, forty-six of the forty-eight command positions in the FDN were held by former members of the National Guard. In lower units, the majority of group and detachment leaders had no previous National Guard service. Ordinary soldiers were mainly disaffected peasants or peasant mercenaries with no guard affiliation. As the fighting continued, many field commanders were promoted from the ranks. Miskito, Sumo, and Rama (Misura), a right-wing Miskito group of 1,500 to 3,000 indigenous troops led by a former Somoza agent, operated in coordination with the FDN. Miskito, Sumo, and Rama All Together (Miskito, Sumo, Rama, Asla Takanka--Misurasata), a Costa Rican-based Miskito group under Brooklyn Rivera Bryan that was aligned with Arde, fought for Caribbean coast autonomy rather than against the Sandinista government.

Beginning with raids across the border, the FDN had by 1983 established a foothold along the Honduran border in the northern section of easternmost Zelaya Department. The FDN was estimated to have a strength of 10,000 to 15,000 persons by mid-1984. Advisory, financial, and material help from the CIA were crucial. According to the United States Department of State, military and nonmilitary assistance between 1982 and 1990 amounted to US$300 million. This figure did not include an additional US$100 million gathered by the United States National Security Council, and aid solicited from private organizations and foreign governments, much of it devoted to weaponry.

Operating out of Costa Rica, Arde included forces from several factions, including those of Edén Pastora Gómez (Commander Zero). Pastora was a hero of the 1978 FSLN takeover of the National Palace who had later become disenchanted with the FSLN. The Arde forces consisted of about 3,000 troops and had produced one well-publicized success by briefly occupying the town of San Juan del Norte. However, a split developed in 1984 when Pastora pulled his forces out of Arde over the issue of unification with the FDN and, as a result, the FDN's military campaign was severely weakened.

The funding of arms for the Contras, as members of the Nicaraguan Resistance had come to be known (short for contrarevolucionarios -- counterrevolutionaries), was cut off by the United States Congress in 1984, contributing to a decline in Contra fortunes. The Contras were reduced to hit-and- run raids targeting civilian installations and sabotaging infrastructure. Subsequently revitalized as arms purchased with private funds reached them, the Contras were able to carry out numerous attacks on isolated military units and occupied the northeast border region with Honduras and some rural mountainous areas. Yet they failed to establish a liberated zone where they could set up a provisional government. The Contras' brutal practices of attacks on rural cooperatives, villages, and clinics, often involving the deaths of civilians and the torture and killing of Sandinista officials and soldiers, brought accusations that the Contras were conducting a deliberate campaign of terrorism.

By mid-1985, the military balance began to shift to the FSLN forces, which had been strengthened by draft call-ups and improved use of militia units. With the EPS numbering 40,000 troops and the active-duty militia 20,000, the government forces' offensive operations drove most of the Contras back into Honduras. Long-range artillery shelled suspected Contra camps just inside the Honduran border. Many Nicaraguan villagers in the war zones were evacuated to resettlement camps to give the government free-fire zones and to deny the Contras local support and intelligence. As part of its shift in tactics, the EPS formed thirteen Irregular Warfare Battalions (Batallones de Lucha Irregulares--BLIs) to carry on the fight against the Contras. The BLIs were lightly armed, highly mobile, quick-reaction forces trained in counterguerrilla tactics. The use of Soviet-supplied helicopters to transport the BLIs added to the military pressure against the Contras.

Boosted by the resumption of weapons and ammunition supplies from the United States in 1986, the Contras mounted new offensives, briefly capturing a number of remote towns and cutting highway links. Some EPS helicopters were shot down with newly acquired shoulder-fired missiles. Although damaging to the Nicaraguan economy and costly in lives, the Contra campaign never posed a serious military threat to Managua or other large cities. The FDN claimed to have 10,000 of its 16,000 fighters operating inside Nicaragua; the FSLN said that there were only 6,000.

Although the United States Congress rejected the request of President Ronald Reagan's administration (1981-89) for additional military aid to the Contras in 1988 while peace negotiations were under way, it approved humanitarian aid that enabled the Contra forces to remain intact. After internationally monitored Nicaraguan elections were set for February 1990, five Central American presidents agreed that a new organization, the International Support and Verification Commission of the Organization of American States, would oversee the voluntary demobilization, repatriation, or relocation of the Contra forces over a ninety-day period. The demobilization process began on April 1, 1990.

Under the terms of the accords, former members of the resistance would have their confiscated property restored, be eligible for grants for rehabilitation and training, and receive parcels of land and credits enabling them to settle in autonomous rural development zones. Widows of slain Contras were to be provided with pensions. These commitments were, at best, only partially fulfilled. Many Contras who settled in the development zones soon abandoned them because the regions lacked the necessary infrastructure. Some ex-Contras also returned to their former homes as fears of Sandinista retribution subsided.