Deng returned on the eve of the breakdown of co-operation between the Kuomintang and the Communist Party, and the political situation was unstable. It was under these circumstances that in March 1927 he accepted the Party's assignment to go to Xi'an and work at the Sun-Yat-sen Military and political Academy. This was the first place where he carried out revolutionary activities in China. The Academy was officially under the general headquarters of Feng Yuxiang's National United Army; actually, however, it had been established by Liu Bojian and several other Communists. Deng Xiaoping served as Chief of the Political Section. political instructor and Secretary of the Communist Party organization in the Academy. The Academy trained a number of political aware junior officers as well as Party and political cadred. It sent some of its graduated to the Political cadres. It sent some of its graduated to the Political Security Corps of the Shaanxi Command of the National United Army, thus gradually building a Communist-led corps of revolutionaries within the army and laying the foundation for the communist-led uprising that took place in Weinan and Huaxian in Shaanxi in April and May 1928. Some future generals of the Northern Shaanxi Red Army were also graduated of the Academy.

In April 1927 an abrupt change occurred in China's political situation. In June Feng Yexiang ordered all the Communists in his army to assemble in Kaifeng in neighboring Henan Province to receive "training". Actually, this was only a pretext to get rid of them. Acting on Party instructions. Deng Xiaoping left Xi'an for Hankou in Hubei Province, where the Central Committee of the Chinese Communist party was located.

In Hankou he worked as a secretary for the central Committee. In the meantime, the political situation continued to deteriorate. Before long the Kuomintang government in Wuhan was openly attacking the Communist party. A grim reign of White terror descended on the country, forcing the Communist Party underground. It was at this time that Deng Xixian changed his name to Deng Xiaoping. On August 7 the Central Committee held an emergency meeting as a non-voting delegate. After the Central Committee secretly moved to Shanghai, the 23-year-old Deng was appointed chief secretary of the Central Committee, in charge of the general headquarters' documents, confidential work, communications and financial affairs. In June 1928, when the Party held its Sixth Congress in Moscow, he stayed behind to help Li Weihan and Ren Bishi, who had been left in charge of day-to-day affairs at headquarters.