The Kachin Independence Army is funded by the KIO, which raises money through regional taxes and trade in jade, timber and gold.

In 1959 Gyi Loveland (Kachin name Zau Bawk), assigned as a counselor, was sent to organise residents to carry out underground operations in northern Shan State.

With a force of 100, the KIA and the Kachin Independence Council (KIC) were formed in Loi Tauk, Sin Li (Theinni) on 5 February 1961.

Base Camp 1 was built about 10 miles (16 km) east of the village of Sin Li, near Kutkai in northern Shan State, and a basic military course was taught on 16 March 1961.

These changes and the federal policy of the Shan Monarchy gave the KIO an opportunity to attack, declaring their aim to establish an independent Kachin republic.

The army grew after it occupied the Mamaw-Sein Lung and Mamaw-Man Wing roads, advancing to the west bank of the Irrawaddy and the northeastern Myitkyina and Hu Gawng valleys.

Zau Tu increased the Brigade 2 strength to 1,400, and it operated in Putao, Chihpwi, Lawk Hkawng, Myitkyina, Mamaw and Kokant.

Zau Seng went to Thailand for help, establishing a base for trading drugs and jade in the border area of Htam Ngawp.

Gyi Zau Bawk, his advisor, sought assistance from SEATO in Chiang Mai, Bangkok and Farthermost in December 1965.

Foreign Minister Maran Brang Seng went to the Chaw Kan valley to discuss the KIA's need for assistance in 1966, but the army received none.

Early in the year, the Tatmadaw pulled some of its forces from Kachin State to establish the 77 Brigade and attack the Communist Party of Burma (CPB); this gave the KIA an opportunity to regroup.

[citation needed] In July 1967, Brigade 2 commander Maran Brang Seng and his comrades took military and political courses and looked for weapons.

[citation needed] In March 1968, Ze Lum (Maru) and Zahkung Ting Ying (Lachid) seceded from the KIA.

[citation needed] Zau Dan provided weapons and trained the Rakhine insurgents, negotiated with Thailand and opened a headquarters in Thanwoo.

In 1968 they fought in the Myitkyina area, occupied camps at Kowapan, Duyitgar and Tingarukaung and established Regiment 10, led by Zaw Dan Although Zau Tu accepted communism, his subordinates and the public did not; the KIA was based on racial and religious beliefs, rather than ideology.

An April 1968 meeting at KIA Brigade 2 headquarters designated Naw Seng's forces as the chief enemy, and the army began fighting them in June.

Ze Lum and Zahkung Ting Ying left the KIA after their return from foreign training and formed Bakapa Battalion 101.

The plan covered political beliefs and objectives, defined the enemy and described the basics of Wunpaawng development and foreign relations.

The army recognised the government as a common enemy, and Lamung Tu Jai and CPB leaders reached an agreement in Mungbaw.

Under the pretext of stopping the CPB, they resumed military operations and attempted to recruit Palaung Battalion 2 under Zau Dan.

The CPB, appointing Naw Seng as military leader, intended to co-opt insurgents into their party after exploiting the KIA as a subordinate organisation.

In the Lwe Khay region, it was led by Vice-chairman Ohn Paung Pon Taing and Chief-of-Staff Sai Hla Aung.

The Shan State Progress Party planned to co-operate with the CBP, and chose a representative to follow Sa Kaw Lae Taw.

They took arms and ammunition and left Pan Sann on 27 November 1973, arriving in the Mong Bon region on 17 April 1974.

The agreement led the KIA to fight the SSA in 1974 in the Kyauk Mae, Nan Ma Tu region.

Zau Tu was disliked by his subordinates; after he forbade marriage for his troops, he married Law Woi Lu Awn in 1966 and Labya Seng Tawng in 1973.

[8] Before the ceasefire the KIA was primarily a guerrilla force, but peace provided an opportunity to establish a military academy and design officer-training programs.

[14] By working with the KIA, the Tatmadaw capitalized on the resource-rich lands under KIO control providing limited recognition in exchange for access to and security of resources like jade, teak and rubber.

[9] In February 2010, Shawng said: "I can't say if there will be war for sure, but the government wants us to become a border guard force for them by the end of the month ... We will not do that, or disarm, until they have given us a place in a federal union and ethnic rights as was agreed in Panglong Agreement in 1947".

[16][17] One reason for breaking the ceasefire was the creation of the Myitsone Dam, which required the inundation of dozens of villages in Kachin State.