Meanwhile there was discussion in the court of Bali on earth. . His ministers and generals as well as Danavas urged unitedly, "O king, all the earthly kingdoms are now ours. Indra cannot hope to match your valor and strength. We must defeat the Devas and annex their kingdom of heaven to our empire. Brahma has granted you immortality and lordship. This is the time to get the full benefit of the boons you have secured from Brahma."

At an auspicious moment decided by Shukracharya, the Danava army got ready to invade heaven. The war trumpets and drums frightened Amaravati, Capital of Heaven. Indra met his foes boldly riding his white elephant Airavata, marching at the head of the united Deva army. Adityas, Varuna, Kubera, Yama and other Devas fought for many days against Bali and his army. But they began to flee from the battlefield one by one unable to face Bali. Having been wounded by Bali's arms, Indra ran for his life and sought the advice of Brihaspati, his preceptor. Brihaspati told Indra : "Devendra, it is futile to fight Bali. You cannot defeat him. Righteousness, truthfulness and justice have made him resplendent and invincible. Therefore it is better that you go underground for some time." Accordingly Indra and the other Devas left Heaven.

After establishing victory over Heaven, the Danavas installed Bali on the heavenly throne as Daityendra and celebrated the occasion as a coronation. Bali appointed his own men in place of the guardian angels of the eight directions, the Sun, the Moon and other positions to represent him in heaven, and returned to his capital on the earth.

The next day Shukracharya said to Bali : "O king of the Danavas, the Heaven also is yours now because of your twin virtues of charity and valor. Since the Under-world is also under your sway, the three worlds, the Earth, the Under-world and the Heaven are yours. But you have appointed Danavas in place of Devas. You have taken away their powers who enjoyed the power to rule over all these worlds which the Creator Brahma and Vishnu the Protector had given them. They may not take it lying low. They are sure to take revenge. If you desire to retain this overlordship of the three worlds permanently you should perform one hundred 'Ashwamedhas' (horse sacrifices). Get ready to perform them from today."