After Khrushchev's "secret speech" of February 1956, which denounced Stalin and his protégés, Rákosi was deposed as General Secretary of the Party and replaced by Ernő Gerő on 18 July 1956.
During the night of 23 October, Hungarian Working People's Party Secretary Ernő Gerő requested Soviet military intervention "to suppress a demonstration that was reaching an ever greater and unprecedented scale". The Soviet leadership had formulated contingency plans for intervention in Hungary several months before.
A large crowd gathered at the Radio Budapest building, which was heavily guarded by the ÁVH. The flash point was reached as a delegation attempting to broadcast their demands was detained and the crowd grew increasingly unruly as rumours spread that the protesters had been shot. Tear gas was thrown from the upper windows and the ÁVH opened fire on the crowd, killing many. The ÁVH tried to re-supply itself by hiding arms inside an ambulance, but the crowd detected the ruse and intercepted it. Hungarian soldiers sent to relieve the ÁVH hesitated and then, tearing the red stars from their caps, sided with the crowd. Provoked by the ÁVH attack, protesters reacted violently. Police cars were set ablaze, guns were seized from military depots and distributed to the masses and symbols of the Communist regime were vandalised.
By noon, on 24 October, Soviet tanks were stationed outside the Parliament, and Soviet soldiers guarded key bridges and crossroads. Armed revolutionaries quickly set up barricades to defend Budapest, and were reported to have already captured some Soviet tanks by mid-morning.
On 24 October, Imre Nagy replaced András Hegedüs as Prime Minister. On the radio, Nagy called for an end to violence and promised to initiate political reforms that had been shelved three years earlier. The population continued to arm itself as sporadic violence erupted.
On 25 October, a mass of protesters gathered in front of the Parliament Building. ÁVH units began shooting into the crowd from the rooftops of neighbouring buildings. Some Soviet soldiers returned fire on the ÁVH, mistakenly believing that they were the targets of the shooting. Supplied by arms taken from the ÁVH or given by Hungarian soldiers who joined the uprising, some in the crowd started shooting back.
In the town of Kecskemét on 26 October, demonstrations in front of the office of State Security and the local jail led to military action by the Third Corps under the orders of Major General Lajos Gyurkó, in which seven protesters were shot and several of the organizers were arrested.
Hungarian general Béla Király, freed from a life sentence for political offences and acting with the support of the Nagy government, sought to restore order by unifying elements of the police, army and insurgent groups into a National Guard. A ceasefire was arranged on 28 October.
From 24 to 29 October, however, there were 71 cases of armed clashes between the army and the populace in fifty communities, ranging from the defence of attacks on civilian and military objectives to fighting with insurgents depending on the commanding officer.
Local revolutionary councils formed throughout Hungary, generally without involvement from the preoccupied National Government in Budapest, and assumed various responsibilities of local government from the defunct Communist party. By 30 October, these councils had been officially sanctioned by the Hungarian Working People's Party, and the Nagy government asked for their support as "autonomous, democratic local organs formed during the Revolution".
On 30 October, armed protesters attacked the ÁVH detachment guarding the Budapest Hungarian Working People's Party headquarters on Köztársaság tér (Republic Square), incited by rumours of prisoners held there and the earlier shootings of demonstrators by the ÁVH in the city of Mosonmagyaróvár.
On 1 November, Imre Nagy received reports that Soviet forces had entered Hungary from the east and were moving towards Budapest. Nagy sought and received assurances (which proved false) from Soviet ambassador Yuri Andropov that the Soviet Union would not invade. The Cabinet, with János Kádár in agreement, declared Hungary's neutrality, withdrew from the Warsaw Pact, and requested assistance from the diplomatic corps in Budapest and Dag Hammarskjöld, UN Secretary-General, to defend Hungary's neutrality. Ambassador Andropov was asked to inform his government that Hungary would begin negotiations on the removal of Soviet forces immediately.
On 3 November, a Hungarian delegation led by the Minister of Defense Pál Maléter was invited to attend negotiations on Soviet withdrawal at the Soviet Military Command at Tököl, near Budapest. At around midnight that evening, General Ivan Serov, Chief of the Soviet Security Police (KGB) ordered the arrest of the Hungarian delegation, and the next day, the Soviet army again attacked Budapest.
In total there were approximately 2,100 local revolutionary and workers councils with over 28,000 members. These councils held a combined conference in Budapest, deciding to end the nationwide labour strikes and resume work on 5 November, with the more important councils sending delegates to the Parliament to assure the Nagy government of their support.
With most of Budapest under Soviet control by 8 November, Kádár became Prime Minister of the "Revolutionary Worker-Peasant Government" and General Secretary of the Hungarian Communist Party. Few Hungarians rejoined the reorganised Party, its leadership having been purged under the supervision of the Soviet Praesidium, led by Georgy Malenkov and Mikhail Suslov.
Imre Nagy along with Georg Lukács, Géza Losonczy, and László Rajk's widow, Júlia, took refuge in the Embassy of Yugoslavia as Soviet forces overran Budapest. Despite assurances of safe passage out of Hungary by the Soviets and the Kádár government, Nagy and his group were arrested when attempting to leave the embassy on 22 November and taken to Romania.