Sirimavo Bandaranaike, the widow of Bandaranaike, took office as prime minister in 1960, and withstood an attempted coup d’état in 1962. During her second term as prime minister, the government instituted socialist economic policies, strengthening ties with the Soviet Union and China, while promoting a policy of non-alignment. In 1971, Ceylon experienced a Marxist insurrection, which was quickly suppressed. In 1972, the country became a republic named Sri Lanka, repudiating its dominion status. Prolonged minority grievances and the use of communal emotionalism as an election campaign weapon by both Sinhalese and Tamil leaders abetted a fledgling Tamil militancy in the north during the 1970s. The policy of standardization by the Sirimavo government to rectify disparities created in university enrolment, which was in essence an affirmative action to assist geographically disadvantaged students to obtain tertiary education, resulted in reducing the proportion of Tamil students at university level and acted as the immediate catalyst for the rise of militancy. The assassination of Jaffna Mayor Alfred Duraiyappah in 1975 by the Liberation Tigers of Tamil Eelam (LTTE) marked a crisis point.
The government of J. R. Jayawardene swept to power in 1977, defeating the largely unpopular United Front government. Jayawardene introduced a new constitution, together with a free-market economy and a powerful executive presidency modelled after that of France. It made Sri Lanka the first South Asian country to liberalize its economy. Beginning in 1983, ethnic tensions were manifested in an on-and-off insurgency against the government by the LTTE. An LTTE attack on 13 soldiers resulted in the anti-Tamil race riots in July 1983, allegedly backed by Sinhalese hard-line ministers, which resulted in more than 150,000 Tamil civilians fleeing the island, seeking asylum in other countries.
Lapses in foreign policy resulted in India strengthening the Tigers by providing arms and training. In 1987, the Indo-Sri Lanka Accord was signed and the Indian Peace Keeping Force (IPKF) was deployed in northern Sri Lanka to stabilize the region by neutralising the LTTE. The same year, the JVP launched its second insurrection in Southern Sri Lanka, necessitating redeployment of the IPKF in 1990. In October 1990, the LTTE expelled Sri Lankan Moors (Muslims by religion) from northern Sri Lanka. In 2002, the Sri Lankan government and LTTE signed a Norwegian-mediated ceasefire agreement.
The 2004 Asian tsunami killed over 35,000 in Sri Lanka. From 1985 to 2006, the Sri Lankan government and Tamil insurgents held four rounds of peace talks without success. Both LTTE and the government resumed fighting in 2006, and the government officially backed out of the ceasefire in 2008. In 2009, under the Presidency of Mahinda Rajapaksa, the Sri Lanka Armed Forces defeated the LTTE and re-established control of the entire country by the Sri Lankan Government. Overall, between 60,000 and 100,000 people were killed during the 26 years of conflict.