This study examines the political and socio-economic reforms introduced during the presidency of Dr. Muhammad Najibullah (1987–1992) in Afghanistan, a period marked by both internal conflict and attempts at national reconciliation. The research focuses on the "National Reconciliation Policy," constitutional amendments, and efforts to decentralize governance amidst the ongoing civil war. Using a historical-analytical approach and archival materials, the paper explores how Najibullah’s reforms aimed to stabilize the state, restructure the People’s Democratic Party of Afghanistan (PDPA), and integrate opposition groups into the political system. While the reforms demonstrated limited success in urban areas, their impact was constrained by persistent armed resistance, external interventions, and deep-rooted tribal divisions. This study contributes to a nuanced understanding of Afghanistan’s late Cold War political trajectory and highlights the complex interplay between ideology, state-building, and conflict during this transformative period.