The Thống Nhất Railway was quickly restored by Thanh Niên Xung Phong (Young Volunteers Corp) to enable transportation between the North and South. Nevertheless, some North Vietnamese soldiers and cadres began to realize that they had been indoctrinated into thinking that the South Vietnamese people were utterly poor and exploited by the imperialists and foreign capitalists. Contradictory to what they were taught, they saw an abundance of food and consumer goods, fashionable clothes, plenty of books and music; things that were hard to get in the North.

Despite some early successes, the Vietnamese Communists made many serious long-term mistakes and caused an overall decline of the country over many years.

In 1976, Vietnam was officially unified and renamed Socialist Republic of Vietnam (SRVN), with its capital in Hà Nội. The Vietnamese Communist Party dropped its front name "Labor Party" and changed the title of First Secretary (used by China) to Secretary General (used by the Soviet Union), with Lê Duẩn remained Secretary General. The National Liberation Front was dissolved. The Party emphasized development of heavy industry and collectivization of agriculture. Over the next few years, private enterprises were seized by the government and their owners often being sent to the New Economic Zone to clear land. The farmers were coerced into state-controlled cooperatives. Transportation of food and goods between provinces was deemed illegal except by the government. Within a short period of time, Vietnam was hit with severe shortage of food and basic necessities. The Mekong Delta, once a world-class rice-producing area, was threatened with famine.

In foreign relations, the SRVN became increasingly aligned with the Soviet Union by joining the Council for Mutual Economic Assistance (COMECON), and signing a Friendship Pact, which was in fact a military alliance, with the Soviet Union. Tension between the SRVN and People's Republic of China mounted as Vietnam moved closer to the Soviet Union (China's rival) and got into conflict with Cambodia (China's ally). The SRVN was also embargoed by the U.S. and its allies.

Many of those who held high positions in the old South Vietnamese government and military, together with influential people in the literary and religious circles, were sent to reeducation camps, which were actually hard labor prison camps. The inhumane conditions and treatment in the camps caused many inmates to remain bitter against the Communist Party decades later.

The SRVN government implemented a Stalinist Dictatorship of the Proletariat in the South as they did in the North. The network of security apparatus (Công An) controlled every aspect of people's life. Censorship was strict and ultra-conservative, with most pre-1975 works in the fields of music, art, and literature being banned. All religions had to be re-organized into state-controlled churches. Any negative comments toward the Party, the government, Uncle Ho, or anything related to Communism might earn the person the tag of Phản Động (Reactionary), with consequences ranging from being harassed by police, expelled from school or workplace, to being sent to prison. Nevertheless, the Communist authority failed to suppress the Black Market, where food, consumer goods, and banned literature could be bought at high prices. The security apparatus also failed to stop a nationwide clandestine network of people planning to escape the country. In many cases, the security officers of some whole districts were bribed and even got involved in organizing the escape schemes.

These living conditions resulted in an exodus of over a million Vietnamese secretly fleeing the country either by sea or overland through Cambodia. For the people fleeing by sea, their wooden boats were often not sea-worthy, packed with people like sardines, and lacked sufficient food and water. Many got caught or shot at by the Vietnamese coast guards, many perished at sea due to boats capsizing, storms, starvation, and thirst. Another major threat was the Thai pirates in the Gulf of Siam, who robbed, raped, and murdered the boat people viciously. In many cases, they massacred the whole boat. Often, they gang raped the women for days then sold them into prostitution. The people who crossed Cambodia faced equal dangers with mine fields, and the Khmer Rouge and Khmer Serei guerillas, who also robbed, raped, and killed the refugees.

The Vietnamese refugees who survived reached UNHCR camps in Thailand, Malaysia, Hong Kong, the Philippines and Indonesia. Some famous camps were Bidong (Malaysia), Galang (Indonesia), Bataan (the Philippines), Songkla (Thailand). While most refugees were resettled to other countries within five years, others languished in these camps for over a decade. In the 1990s, refugees who could not find asylum were deported back to Vietnam. Communities of Vietnamese refugees emerged in the US, Canada, Australia, France, West Germany, and the UK. The refugees often sent relief packages packed with necessities, such as medicines, fabrics, toothpaste and soap, dried food, etc., to their relatives in Vietnam to help them survive. Very few would send money as it would be exchanged far below market rates by the Vietnamese government.

Vietnamese-led forces entering Phnom Penh in 1979.In late 1978, following repeated raids by the Pol Pot regime in Cambodia into Vietnamese territory, Vietnam sent troops to overthrow Pol Pot. The pro-Vietnamese People's Republic of Kampuchea was created with Heng Samrin as Chairman. Pol Pot's Khmer Rouge allied with non-Communist guerilla forces led by Norodom Sihanouk and Son Sann to fight against the Vietnamese forces and the new Phnom Penh regime. Some high ranking officials of the Heng Samrin regime in the early 1980s resisted Vietnamese control, resulting in a purge that removed Pen Sovan, Prime Minister and Secretary General of the Cambodian People's Revolutionary Party. The war lasted until 1989 when Vietnam withdrew its troops and handed the administration of Cambodia to the United Nations. The Vietnamese invasion of Cambodia, on a positive note, helped stop the genocide of millions of Cambodians by the Khmer Rouge (see Khmer Rouge and Cambodia under Pol Pot).

In early 1979, China invaded Vietnam to "teach Vietnam a lesson" for persecuting ethnic Chinese and for invading Cambodia. The Sino-Vietnamese War was brief, but casualties were high on both sides.

Vietnam's third Constitution, based on that of the USSR, was written in 1980 . The Communist Party was stated by the Constitution to be the only party to represent the people and to lead the country.

In 1980, cosmonaut Phạm Tuân became the first Vietnamese and the first Asian to go into space, traveling on the Soviet Soyuz 37 to service the Salyut 6 space station.

During the early 1980s, a number of overseas Vietnamese organizations were created with the aim of overthrowing the Vietnamese Communist government through armed struggle. Most groups attempted to infiltrate Vietnam but eventually were eliminated by Vietnamese security and armed forces. Most notable were the organizations of Hoàng Cơ Minh from the US, Võ Đại Tôn from Australia, and Lê Quốc Túy from France. Hoàng Cơ Minh was killed during an ambush in Laos. Võ Đại Tôn was captured and imprisoned until his release, in the 1990s, due to diplomatic pressure. Lê Quốc Túy escaped to France after many of his comrades were arrested and executed. Lê Quốc Túy later died in France from poison.

Throughout the 1980s, Vietnam received nearly billion a year in economic and military aid from the Soviet Union (USSR) and conducted most of its trade with the USSR and other COMECON (Council for Mutual Economic Assistance) countries. Some cadres, realizing the economic suffering of the people, began to break rules and experimented with market-oriented enterprises. Some got punished for their feats, but years later would be hailed as visionary pioneers.