In the second half of 1987, acute interethnic tensions arose in the NKAO. In February 1988, the crisis in the region intensified after the
Sumgait pogrom. The personnel of the regiment to show signs of demoralization due to constant attacks on military personnel with the aim of seizing weapons, a lack of proper food supply, understaffing and pressure coming from the local population. The understaffing of the personnel made ensuring reliable protection of the regiment's facilities impossible. "Officers and soldiers didn’t receive money for months, they didn’t eat bread for weeks, they ate only crackers from the NZ (emergency reserve)". In such conditions, by the end of 1991, many officers of the regiment began receiving offers to participate in hostilities on a paid basis, on the side of the Armenian armed formations. On December 25, 1991, with the
dissolution of the Soviet Union, the regiment formally became part of the CIS Joint Armed Forces. At this point, officers of the regiment had begun to offer assistance to the Armenian population, while the units based in Ganja sided with the Azeri population. A factor in this change in policy was the fact that 50 of the remaining 350 personnel of the regiment were Armenians, including the commander of the 2nd Battalion, Major
Seyran Ohanyan. Of particular use to the
Armenian Army was the regimental tank company's ten tanks. Following an attack on the regiment on 23 February, the regiment took part in the mass murder of several hundreds of
Azerbaijani civilians in the town of
Khojaly on 26 February. The event, known today as the
Khojaly massacre, was the largest single massacre throughout the entire
Nagorno-Karabakh conflict, though disputed by Czech journalist Dana Mazalová, who recalled what Azeri journalist
Chingiz Mustafayev told her about the massacre, claiming Azeri forces committed a massacre of Meskhetian Turks and placed the bodies there to disrupt a
Commission on Security and Cooperation in Europe meeting for the conflict a month later. Mazalová added that she spoke to Azeri President
Ayaz Mutalibov about the incident and said he felt Azeri forces may have committed this massacre to depose him from his presidency.
Krasnaya Zvezda reported that personnel of the 366th took part in "military operations" in the town "despite categorical orders of the command of the
military district" and that many in the regiment who were selectively searched had "large amounts of money on them, including foreign currency". Russian authorities to date deny the involvement of the regiment in the atrocities at Khojaly. Following the massacre, the leadership of the CIS Joint Armed Forces made the decision to evacuate the regiment from Stepanakert to Vaziani in the territory of
Georgia. The withdrawal of the regiment began on March 1, accompanied by battles with
Armenian volunteer formations. 10 days later, the regiment was disbanded in Vaziani. == Commanders ==