Preparations went on their way for the next offensive in 1987, Operacao Saludando Octubre and once more the Soviets upgraded the FAPLA's equipment including 150 T-55 and T-54B tanks and Mi-24 and Mi-8/Mi-17 helicopters. Again they dismissed warnings of a South African intervention. Pretoria, taking notice of the massive military build-up around Cuito Cuanavale, warned UNITA and on 15 June authorized covert support. In spite of these preparations, on 27 July Castro proposed Cuba's participation in the negotiations, indicating that he was interested in curtailing its involvement in Angola. The Reagan administration declined.
From the very start of the FAPLA-offensive it was clear to Pretoria that UNITA could not withstand the onslaught and on 4 August 1987 launched clandestine Operation Modular, which engaged in the first fights 9 days later. The FAPLA reached the northern banks of the Lomba River near Mavinga on 28 August and were expected by the SADF. In a series of bitter fights between 9 September and 7 October they prevented the FAPLA from crossing the river and stopped the offensive for a third time. The FAPLA suffered heavy losses and the Soviets withdrew their advisors from the scene leaving FAPLA without senior leadership. On 29 September the SADF launched an offensive aiming to destroy all FAPLA forces east of the Cuito River. On 3 October it attacked and annihilated a FAPLA-battalion on the southern banks of the Lomba River and two days later FAPLA started its retreat to Cuito Cuanavale.The SADF and UNITA pursued the retreating FAPLA units and started the siege of Cuito Cuanavale on 14 October with long-range shelling by 155 mm artilleryfrom a distance of 30 to 40 km.
Cuito Cuanavale, only a village, was important to FAPLA as a forward air base to patrol and defend southern Angola and considered an important gateway to UNITA's headquarters in the south-east. With the South Africans on the counter-attack, the town and base and possibly all of Cuando Cubango were now under threat, as was FAPLA's planned advance southwards against UNITA; on 15 November Luanda requested urgent military assistance from Cuba. Castro approved the Cuban intervention, Operation Maniobra XXXI Anniversario on the same day, retaking the initiative from the Soviets. As in 1975, Cuba again did not inform the USSR in advance of its decision to intervene. For the second time Cuba dispatched a large contingent of troops and arms across the ocean: 15,000 troops and equipment, including tanks, artillery, anti-aircraft weapons and aircraft. Although not responsible for the dismal situation of the FAPLA Cuba felt impelled to intervene in order to prevent a total disaster for the Angolans. In Castro's view, a South African victory would have meant not only the capture of Cuito and the destruction of the best Angolan military formations, but, quite probably, the end of Angola's existence as an independent country. Around mid-January Castro let the Angolans know that he was taking charge and the first Cuban enforcements were deployed at Cuito Cuanavale.
The Cuban's initial priority was saving Cuito Cuanavale, but while enforcements were arriving at the besieged garrison they made preparations for a second front in Lubango where the SADF had been operating unhindered for 8 years.
By early November, the SADF had cornered FAPLA units in Cuito Cuanavale and was poised to destroy them. On 25 November the UN Security Council demanded the SADF's unconditional withdrawal from Angola by 10 December, but the US ensured that there were no repercussions for South Africa. US Assistant Secretary for Africa Chester Crocker reassured Pretoria's ambassador: "The resolution did not contain a call for comprehensive sanctions, and did not provide for any assistance to Angola. That was no accident, but a consequence of our own efforts to keep the resolution within bounds." Through December the situation for the besieged Angolans became critical as the SADF tightened the noose around Cuito Cuanavale. Observers expected it to fall into South African hands any time soon and UNITA prematurely announced the town had been taken.
Starting 21 December the South Africans planned the final operation to "pick off" the five FAPLA brigades which were still to the east of the Cuito river "before moving in to occupy the town if the conditions were favourable". From mid-January to the end of February the SADF launched six major assaults on FAPLA positions east of the Cuito river, none of which delivered tangible results. Although the first attack on 13 January 1988 was successful, spelling near disaster for a FAPLA brigade, the SADF was unable to continue and retreated to its starting positions. After a month the SADF was ready for the second assault on 14 February. Again it withdrew after successfully driving FAPLA-Cuban units off the Chambinga high ground. Narrowly escaping catastrophe the FAPLA units east of the Cuito River withdrew to the Tumpo (river) triangle, a smaller area, ideally suited to defence. On 19 February the SADF suffered a first major setback when a third assault against a FAPLA battalion north of the Dala river was repelled; the SADF was unable to reach FAPLA's forward positions and had to withdraw. In the following days the Cubans stepped up their air attacks against South African positions. On 25 February the FAPLA-Cubans repelled a fourth assault and the SADF had to retreat to their positions east of the Tumpo River. The failure of this attack "proved a turning point of the battle of Cuito Cuanavale, boosting FAPLA's flagging morale and bringing the South African advance to a standstill." A fifth attempt was beaten back on 29 February delivering the SADF a third consecutive defeat. After some more preparation the South Africans launched their last and fourth unsuccessful attack on 23 March. As SADF-Colonel Jan Breytenbach wrote, the South African assault "was brought to a grinding and definite halt" by the combined Cuban and Angolan forces.
Eventually Cuban troop strength in Angola increased to about 55,000, with 40,000 deployed in the south. Due to the international arms embargo since 1977, South Africa's aging air force was outclassed by the sophisticated Soviet-supplied air defence system and air-strike capabilities fielded by the Angolans and it was unable to uphold the air supremacy it had enjoyed for years; its loss in turn proved to be critical to the outcome of the battle on the ground.
Cuito Cuanavale was the major battle site between Cuban, Angolan, Namibian and South African forces. It was the biggest battle on African soil since World War II and in its course just under 10,000 soldiers were killed. Cuban planes and 1,500 Cuban soldiers had reinforced the Angolans at Cuito. After the failed assault on 23 March 1988, the SADF withdrew leaving a 1,500-man "holding force" behind and securing their retreat with one of the most heavily mined areas in the world. Cuito Cuanavale continued to be bombarded from a distance of 30 to 40 km.