On the morning of July 26, Lashio experienced intense violence with multiple clashes reported at Lashio Motel, Lashio University, and around Mansu Pagoda. The violence follows a series of confrontations between the Myanmar National Democratic Alliance Army (MNDAA) and military forces.

The fighting began on July 25 when MNDAA fighters, believed to have entered the city from the Mehang Gate, launched an attack on Lashio University. Using heavy weapons, they targeted the campus, including the Naungcho hostel and gym, although no casualties were reported. Significant damage was noted in the convocation hall, possibly from drone strikes. Security forces responded, leading to a temporary retreat by the MNDAA.

The conflict spread to the Lashio Motel, formerly owned by Asia World Company, which sustained severe damage and was reportedly set ablaze during the fighting. Local residents reported continuous gunfire throughout the day and night, with MNDAA forces taking positions around Butaryone Road and Lashio University.

A Lashio resident described the situation: “We heard constant small arms and heavy weapon fire. The MNDAA seemed to have entered from Butaryone Road, and there was fierce fighting at Lashio University. The Lashio Motel, near the township hall, was destroyed by fire. The Tatmadaw took defensive positions and managed to repel the attackers. People have sought refuge in safer areas.”

Despite claims from exile media that the MNDAA had captured Lashio and occupied the northeastern command, investigations indicate that the MNDAA has not seized control of the regional military headquarters or surrounding camps. According to local sources and military Telegram channels, the MNDAA's claims of capturing the northeast command were part of a psychological warfare strategy.

A local familiar with the situation stated, “The MNDAA is using Psywar tactics. They falsely claimed to have captured the northeast command. Although they show photos and reports, they have not taken any significant strongholds. The army has responded with airstrikes and is working to secure the area.”

On July 25, the MNDAA also issued a statement warning against the spread of false information about their control of military positions. They declared the establishment of a Lashio City Administrative Commission and designated Lashio as a special administrative region.

Additionally, Kosai Lashio, a well-known charity worker in the area, was injured by a sniper during the clashes. The source of the attack remains unclear, though some reports suggest it may have been from MNDAA forces.

Despite the MNDAA's declared cease-fire until the end of July in response to requests from China, fighting continues. Residents are fleeing Lashio, with many relocating to safer areas, while some remain trapped in the city amidst ongoing violence.