Empress Yu had died suddenly in winter 507, and in early 508, her young son Yuan Chang, Xuanwu's only son by this point, dies suddenly as well.

Because Gao Zhao is now exceeding powerful, and his niece Consort Gao is Xuanwu's favorite concubine, it is largely suspected that Gao Zhao and Gao had murdered them, but there is no conclusive proof.

In 508, Xuanwu creates Gao as Empress to replace Yu, despite opposition by Yuan Xie, and from this point on Gao Zhao becomes resentful of Yuan Xie.

Xuanwu's younger brother Yuan Yu the Prince of Jingzhao, who had just been demoted by Xuanwu for corruption, becomes angry at both his demotion and that his favorite consort Lady Li had been severely battered by Empress Yu briefly before Empress Yu's death (because Yuan Yu's wife was Empress Yu's sister but was not favored by him).

Yuan Yu declares a rebellion at his provincial post of Xindu (in modern Hengshui, Hebei) in fall 508 and proclaims himself emperor.

Gao Zhao uses this opportunity to falsely accuse Yuan Xie of acting in concert with both Yuan Yu (because Yuan Yu had forced Yuan Xie's uncle Pan Senggu into joining his rebellion) and the Liang Dynasty.

Xuanwu believes Gao, and forces Yuan Xie to commit suicide.

The populace and the officials greatly mourn Yuan Xie's death, and grow increasingly resentful of Gao.

Soon, Yuan Yu's rebellion is defeated, and while Xuanwu contemplates not putting Yuan Yu to death, Yuan Yu is killed on Gao's orders.