Under the Tongzhi Emperor
Before the Xianfeng Emperor died in August 1861 in the Chengde Mountain Resort, he appointed a group of eight regents – led by Zaiyuan, Duanhua and Sushun – to assist his underage son and successor, Zaichun. Yixin's flexible attitude towards dealing with the Western powers had put him at odds with the eight regents, who were politically conservative and opposed to Western influence. Upon request, Prince Gong was granted permission to travel to Chengde to attend the funeral. In Chengde, he met the Empress Dowagers Ci'an and Cixi and told them about how the eight regents monopolised state power. When the Xianfeng Emperor's coffin arrived back in Beijing in November 1861, Prince Gong and the two empress dowagers launched a coup – historically known as the Xinyou Coup (辛酉政變) – to oust the eight regents from power. The regents were arrested and removed from their positions of power.
Zaichun, who was enthroned as the "Tongzhi Emperor", appointed Prince Gong as Prince-Regent (議政王) and granted him some special privileges. These privileges included: "iron-cap" status awarded to the Prince Gong title/peerage; an increment in salary to twice that of a normal qinwang (first-rank prince); exemptions from having to kowtow in the emperor's presence and having to write his name on memorials submitted to the emperor. Prince Gong firmly declined to accept the "iron-cap" privilege, and instead sought to be concurrently appointed as zongling (宗令; Head of the Imperial Clan Court) and put in charge of the Shenjiying (a firearms-equipped unit in the Qing army). The two empress dowagers also ordered Prince Gong to supervise Hongde Hall (弘德殿; a hall in the Forbidden City), where the Tongzhi Emperor studied.
In 1864, Qing forces finally suppressed the Taiping Rebellion after a war lasting more than a decade, and recaptured Jiangning (江寧; in present-day Nanjing) from the rebels. The imperial court issued a decree to praise Prince Gong for his effective leadership in the regency that led to the end of the rebellion – in addition to conferring more prestigious titles on his sons Zaicheng, Zaijun and Zaiying.
As the longstanding leader of the Zongli Yamen, which he established in 1861, Prince Gong was responsible for spearheading various reforms in the early stages of the Self-Strengthening Movement, a series of measures and policy changes implemented by the Qing government with the aim of modernising China. He also founded the Tongwen Guan in 1862 for Chinese scholars to study technology and foreign languages.
Around April 1865, an official, Cai Shouqi (蔡壽祺), accused Prince Gong of "monopolising state power, accepting bribes, practising favouritism, behaving arrogantly, and showing disrespect towards the Emperor". The Empress Dowagers Ci'an and Cixi publicly reprimanded Prince Gong and stripped him of his position as Prince-Regent. Yishen (奕脤), Yixuan, Wang Zheng (王拯), Sun Yimou (孫翼謀), Yin Zhaoyong (殷兆鏞), Pan Zuyin, Wang Weizhen (王維珍), Guangcheng (廣誠) and others pleaded with the empress dowagers to pardon Prince Gong and make him Prince-Regent again. Although the empress dowagers did not restore Prince Gong as Prince-Regent, they permitted him to remain in the inner imperial court and continue running the Zongli Yamen. Prince Gong personally thanked the empress dowagers and made a tearful apology. The empress dowagers issued a decree announcing: "The Prince practised favouritism. As we are bound by a common cause and have high expectations of him, we cannot show leniency in punishing him. He will still be allowed to oversee the Grand Council."
In March 1868, as the Nian rebels approached the suburbs of Beijing, Prince Gong was tasked with mobilising troops and managing defence arrangements. He was also appointed as you zongzheng (右宗正; Right Director of the Imperial Clan Court).
In 1869, An Dehai, a court eunuch and close aide of Empress Dowager Cixi, was arrested and executed in Shandong Province by Ding Baozhen, the provincial governor. This was because it was a capital crime for eunuchs to travel out of the Forbidden City without authorisation. The empress dowager became more suspicious of Prince Gong because she believed that he instigated Ding Baozhen to execute An Dehai.
In October 1872, when the Tongzhi Emperor married the Jiashun Empress, he granted Prince Gong the "iron-cap" privilege again. He officially took over the reins of power from his regents in around February 1873. In the same year, Prince Gong displeased Empress Dowager Cixi when he strongly opposed her plan to rebuild the Old Summer Palace.
In August 1874, Prince Gong was reprimanded and punished again for failing to observe court protocol. This time, he was demoted from a qinwang (first-rank prince) to a junwang (second-rank prince). Zaicheng, Prince Gong's eldest son, also lost his beile title. Despite his demotion, Prince Gong was still allowed to remain in the Grand Council. The following day, the empress dowagers ordered Prince Gong and Zaicheng to be restored as a qinwang and beile respectively. Towards the end of the year, the Tongzhi Emperor increased Prince Gong's salary by more than twice that of a normal qinwang, but died not long later in around December.