An eight-man unit of the Provisional Irish Republican Army (IRA) launched an attack on the Royal Ulster Constabulary (RUC) base in the village.

An IRA member drove a digger with a bomb in its bucket through the perimeter fence, while the rest of the unit arrived in a van and fired on the building.

Soldiers from the British Army's Special Air Service (SAS) then returned fire both from within the base and from hidden positions around it in a pre-planned ambush, killing all of the attackers.

Members of the unit, such as Jim Lynagh and Pádraig McKearney, advocated a strategy of destroying bases and preventing them being rebuilt or repaired in an attempt to "deny ground" to British forces.

[11][12] The British security forces however had received intelligence weeks prior to the attack of the IRA's plan and at least 10 days before of the target.

At the same time, another team would arrive in a van and open fire on the base,[3] with the aim of killing the three RUC officers as they came off duty.

[20] Not seeing any activity in the station in their two slow passes of it, members of the IRA unit felt that something was amiss,[20] and debated whether to continue, but decided to go ahead with the attack.

[12] Tony Gormley and Gerard O'Callaghan got out of the van and joined Declan Arthurs on the digger, according to journalist Peter Taylor, "literally riding shotgun", with weapons in one hand and a lighter in the other.

[3] In the front bucket was 300–400 lb (140–180 kg)[1] of explosive inside an oil drum, partially hidden by rubble and wired to two 40-second fuses.

The van stopped a short distance ahead and, according to the British security forces, three of the team jumped out and fired on the building with automatic weapons.

[21] According to author Jonathan Trigg, the bomb in the bucket of the digger detonated several seconds after the SAS had opened fire.

An ex-RUC Special Branch officer, John Shackles, described how the SAS had strung detonating cord along a line of fir trees opposite the police station, beyond a playing field.

[22] Within seconds the SAS opened fire on the IRA attackers from the station and from hidden positions outside with M16 and H&K G3 rifles and two L7A2 general-purpose machine guns.

[24][25] Three other IRA members in the scout cars escaped from the scene, managing to pass through British Army and RUC check-points set up after the ambush had been sprung.

Anthony was driving and Oliver, who was wearing blue coveralls similar to those worn by the IRA members, was sitting in the front passenger seat.

[5][1] Roughly 130 yards (120 m) from the police station, soldiers opened fire on their car from behind, killing Anthony and badly wounding Oliver.

[7] A mother and her child took shelter in the church hall after their Ford Sierra's rear window was hit by a stray bullet 250 yards (230 m) from the station.

[34] It was found that another of the guns had been used in the murder of Harold Henry, a builder employed by the British Army and RUC in facilities construction in Northern Ireland.

[35] In 2017 declassified documents from the National Archives of Ireland revealed that the British government had ballistic tests which showed that the weapons recovered from the deceased IRA members had actually been used in as many as forty to fifty killings in total, including every fatality in IRA attacks in the counties Fermanagh and Tyrone in 1987 before the ambush at Loughgall.

[1] Lawyers representing six families of IRA members withdrew from the inquest on the second day of hearings as the Coroner would not provide copies of witness statements to enable them to prepare.

[53] In January 2014, the High Court ordered that the families of the IRA members suing the MoD could widen their claim to include the RUC Chief Constable.

[54] The police later disclosed documents for the court case revealing that IRA members had been under military surveillance for weeks prior to the ambush.

[55] In March 2014, the Hughes family received an apology from the MoD for the death of Anthony and for injuring Oliver, stating that both men were "wholly innocent of any wrongdoing".

[59] In April 2020, lawyers acting on behalf of the families lodged a submission with the Committee of Ministers of the Council of Europe requesting an infringement proceeding in the ECHR for the 2001 judgement as the coroner had not fixed a hearing date for the inquest.