During the 1980s and until the mid‐1990s, Peru experienced one of the bloodiest conflicts in contemporary Latin America, initiated by the armed insurrection launched by the Partido Comunista del Perú – Sendero Luminoso (Shining Path). Most guerrilla activity, armed confrontations and civilian fatalities occurred in Andean rural districts. The intensity of violence declined following the detention of PCP‐SL General Secretary Abimael Guzmán and other leading cadres in 1992–3, which resulted in the dismantling of a substantial component of the organization's military apparatus and support networks. This paper examines how surviving PCP‐SL militants attempted to regroup and respond strategically and tactically to such a devastating setback, focusing on its dealings with the civilian population, particularly coca‐producing smallholders. Counter‐insurgency measures pursued by the Peruvian state are also analysed. The paper concludes with an assessment of the current disposition of guerrilla – rural population – state relations in the main areas of conflict.