The great Wu Daozi, famous for his Buddhist and Daoist landscape and figure paintings on the walls of temples, dies in about 760. (Although almost none of his works survive, contemporaries hailed his brushwork as extraordinarily bold and spontaneous, in contrast to the mannered Tang court style of painting.)

After Emperor Xuanzong's return to Chang'an, he had taken residence at Xingqing Palace, which is converted from his residence as an imperial prince.

Gao Lishi and the general Chen Xuanli attend to him, as do Emperor Xuanzong's younger sister Li Chiying the Princess Yuzhen, the lady in waiting Ru Xianyuan, and the eunuchs Wang Cheng'en and Wei Yue.

These attendants of Emperor Xuanzong do not respect Li Fuguo.

To retaliate, Li Fuguo begins to try to persuade Emperor Suzong that Emperor Xuanzong and his attendants were plotting to seize power back.

With Emperor Suzong's tacit, although not explicit, approval in 760, on one occasion when Emperor Xuanzong is out riding, Li Fuguo intercepts him and forces him to move back to the main palace.

Even on this occasion, however, Gao will not submit to Li Fuguo, and even yells at Li Fuguo to force him to get off his horse and to escort Emperor Xuanzong on foot, along with Gao.

Soon after Emperor Xuanzong is forcibly moved, Li Fuguo forces Chen to retire, Li Chiying to return to her temple (she had become an ordained Taoist nun in 711), and exiles Gao, Wang, Wei, and Ru.

Emperor Suzong has his daughters Princesses Wan'an and Xianyi attend to Emperor Xuanzong, but Emperor Xuanzong, depressed over his forced movement and the exile of his attendants, begins to be ill.

Emperor Suzong regrets this and considers killing Li Fuguo, but fears the fact that Li Fuguo has command of the imperial guards, and therefore does not act.

Li Fuguo is made the minister of defense (Bingbu Shangshu) in 761, but further wants to be made chancellor.

Emperor Suzong, who by this point is fearful of Li Fuguo, refuses on the basis that he does not have the support of the officials, Li Fuguo tries to persuade Pei Mian, a senior official who had previously been chancellor, to recommend him.

Emperor Suzong tells the chancellor Xiao Hua that if an important official (i.e., someone like Pei) recommended Li Fuguo, he would no longer have the excuse to refuse Li Fuguo's request.

When Xiao subsequently discusses this with Pei, Pei adamantly states that he will never allow Li Fuguo to be chancellor.

Subsequently, Li Fuguo is not able to be chancellor while Emperor Suzong is alive, much to Li Fuguo's resentment.

Li Fuguo, bearing a grudge against Xiao, insists to Emperor Suzong in 762 that Xiao be removed and replaced with Yuan Zai.

Throughout the years, Empress Zhang and Li Fuguo's alliance has held.

However, as of spring 762, when both Emperors Xuanzong and Suzong are seriously ill, Empress Zhang and Li Fuguo have begun to be rivals.

She summons Li Chu (whose name had been changed to Li Yu and who had been created crown prince) and tries to persuade him to join her in killing Li Fuguo and his ally Cheng Yuanzhen.

Li Yu declines, and she instead tries to persuade his younger brother Li Xi the Prince of Yue, to join her.

Li Xi agrees.

She and Li Xi thereafter have the eunuch Duan Hengjun select some two hundred strong eunuchs, ready to ambush Li Fuguo and Cheng.

On May 14, Empress Zhang issues an order in Emperor Suzong's name, summoning Li Yu.

Cheng finds out and informs Li Fuguo, who intercepts Li Yu at the palace gate and then escorts him to the camp of the imperial guards under Li Fuguo's command.

The guards under Li Fuguo's command now enter the palace and arrest Empress Zhang and Li Xi; the other eunuchs and ladies in waiting flee, leaving Emperor Suzong without care.

On May 16, Emperor Suzong dies, and Li Fuguo thereafter executes Empress Zhang and Li Xi, as well as Li Xian the Prince of Yan, and then declares Li Yu emperor (as Emperor Daizong).

Emperor Daizong is secretly displeased, but in order to placate Li Fuguo, gives him the title of Shangfu (meaning, "like father") and ordersthat he not be referred to by name.

He also makes Li Fuguo Sikong (one of the Three Excellencies) and Zhongshu Ling—the head of the legislative bureau of government (Zhongshu Sheng) and a post considered one appropriate for a chancellor.

Li Fuguo gives a major part of the command responsibilities to Cheng Yuanzhen.

Carrying out further retaliation against Xiao Hua, Li Fuguo has Xiao further demoted.

Li Fuguo does not expect that both Emperor Daizong and Cheng, who want more power, will turn against him.

In summer 762, at Cheng's secret suggestion, Emperor Daizong issues an edict that strips Li Fuguo of the titles of minister of defense and assistant of military affairs to the supreme commander—thus stripping him of military command—giving the latter post to Cheng.

He also orders Li Fuguo to leave the palace and take residence up outside, although he creates Li Fuguo the Prince of Bolu.

Li Fuguo becomes apprehensive and offers to retire, and Emperor Daizong declines and sends him away with formal respect.

Because Li Fuguo had killed Empress Zhang and had supported him for the throne, Emperor Daizong does not want to kill him openly.

Instead, on November 8, 762, an assassin gets into Li Fuguo's mansion and kills him, taking his head and an arm away as well.

Emperor Daizong formally issues an order seeking the arrest of the assassin, and buries Li Fuguo in a grand ceremony, after having a wooden head and wooden arm carved to be buried with the rest of the body, although he gives Li Fuguo the unflattering posthumous name of Chou (meaning "power abuser").