By spring of 1920 the civil war had entered its final phase, with the invasion of Russia by the armies of the newly independent Poland. The Poles reached Kiev, the capital of the Ukraine, by May 8, but Trotsky's Red Army repelled them, and eventually pushed the war back into Poland before the Russian counteroffensive finally stalled out near Warsaw in July. Meanwhile, the White armies in the south were in full retreat, and by November 1920 they were being evacuated across the Black Sea to Turkey, leaving Russia to the Communists. As the last of the Whites were abandoning the war effort, Inessa Armand died suddenly of cholera, a shocking blow to Lenin–she was, whatever the exact nature of their relationship, his only true friend. Thereafter, he was alone, and some biographers have traced to beginning of his decline to Inessa's death.

Meanwhile, Lenin held control of Russia, at least temporarily. In Siberia and the border regions, a number of quasi-independent states had arisen, and in 1921 and '22 the Red Army moved to bring these regions, including Stalin's native Georgia, within the Communist fold. But Lenin and his fellow Communists faced other problems, including the disastrous failure of his economic policy of "War Communism," which entailed the seizure of food from the peasantry to fuel the war effort. This policy led to an extreme drop in productivity: by 1920 the peasantry were cultivating only 62 percent as much land as in 1914. This decline, coupled with the breakdown in transportation during the war and a severe drought, led to the terrible famine that swept Russia in 1921, eventually leaving nearly 5 million dead. This famine led to an uprising among the sailors at the naval base of Kronstadt in March 1921, which forced Lenin to announce his New Economic Policy on March 8. (The sailors, however, were branded "bourgeois" agitators and gunned down, although they had been the Bolsheviks' strongest supporters during the Revolution.) The N.E.P. constituted a retreat from socialism: it maintained state control of the major industries, but allowed for farmers and small-scale manufacturers to trade freely, restoring some measure of prosperity to the countryside. It was, in some sense, an admission of defeat, since it suggested that despite all of Lenin's predictions, Russia was not yet ready to adopt pure Marxism in the economic sphere.

By the end of the civil war, Lenin also had to face the fact that, while he had always confidently expected Russia's revolution to lead to a world-wide revolution, this second, universal uprising had failed to materialize. The Communists continued to channel funds abroad to foment rebellions in the capitalist countries, sending vast sums to Western Europe even as their own people starved, but German authorities had put down Marxist uprisings there, and for now, at least, it seemed that Russia would have to build utopia on its own. To this end, Lenin and his circle of advisers–his political bureau, or Politburo–began to organize their territory into what came to be called the Union of Soviet Socialist Republics, or U.S.S.R. In theory, this was to be a federation of independent nationalities, to be joined by other "soviet republics" as revolution spread around the world. In practice, however, it was a reconstruction of the old Russian Empire–now simply under the auspices of the Communist Party.

At the Eleventh Party Congress, held April 1922, Lenin expanded his Politburo to include seven members, most of whom would play key roles after Lenin's death. They included: Trotsky, the hero of the civil war, and Lenin's own favorite; Stalin, recently elected as General Secretary of the Party; two close friends of Lenin, Kamenev and Zinoviev; and three others, Nikolai Bukharin, Alexei Rykov, and Mikhail Tomsky.The rivalries among these men took on a sudden importance when, on May 25, 1922, Lenin suffered his first stroke. His health had been poor for some time, and throughout 1921 he had complained of tiredness, taking long holidays at his home near the town of Gorki, southwest of Moscow. With this stroke, however, he began a precipitous decline that would lead to his death within two years.

Throughout the summer of 1922, Lenin convalesced at Gorki, with Krupskaya beside him. For a time, his symptoms seemed to be lessening, although his vitality was ebbing, and he increasingly appeared frail and old. In the autumn months, he returned to Moscow and began to take part in Party business again, but in December he suffered a series of attacks that left him bedridden. Stalin was given charge of his medical care. However, the younger man did not make a disinterested caretaker: he and Lenin had recently come into conflict over whether the state monopoly on foreign trade should be abolished. The government maintained its monopoly, as Lenin wished, after Trotsky stepped in to support him, and Lenin penned a note to Trotsky in late December thanking him for his backing. The note infuriated Stalin, who no doubt felt his own position in the Politburo weakening, and he gave Krupskaya much verbal abuse for allowing her bedridden husband to write it. Lenin would not learn of this incident until March of 1923, at which point he demanded an apology from Stalin and threatened to break off relations with him. But by then he had already developed doubts about Stalin's trustworthiness, which he expressed in a Testament that he finished writing in January 1923. In those pages, which would be read to the Central Committee after his death, he warned of a coming struggle for power between Trotsky and Stalin, and expressed his preference for Trotsky; he further suggested that his fellow Communists remove Stalin from his post of General Secretary, as his temperament made him unsuited to the job.

Had Lenin lived, he and Trotsky would have likely brought down Stalin, who lacked the resources to stand up to both men together. Indeed, early in 1923 Lenin was discussing with Trotsky the possibility of purging the Stalin- controlled bureaucracy, and had ordered an investigation into Stalin's handling of recent disturbances in Georgia. But even as the incident with Krupskaya flared into the open and Stalin scrambled to compose an apology, Lenin suffered a final stroke on March 7, 1923. He would never recover the power of speech. Throughout the summer of 1923, he lay close to death, and for the moment political struggles settled into the background. But the battle lines were forming in the Politburo and Central Committee. Trotsky seemed to hold the most powerful position, thanks to his close friendship with Lenin, but an opposition had already begun to emerge, as Stalin formed an alliance with Kamenev and Zinoviev called the "troika," or "triumvirate." As Lenin inched closer to death, this threesome launched a series of attacks on Trotsky in party meetings, drawing on his writings and speeches from his years as a Menshevik to attack him for disloyalty to Leninism. Then, on January 21, 1924, Lenin died of a brain hemorrhage, at the age of fifty-three.