In January 1950, the communist nations, led by the People's Republic of China (PRC), recognized the Viet Minh's Democratic Republic of Vietnam as the government of Vietnam. Non-Communist nations recognized the French-backed State of Vietnam in Saigon led by former Emperor Bảo Đại the following month. The outbreak of the Korean War in June 1950 convinced many Washington policymakers that the war in Indochina was an example of communist expansionism directed by the Kremlin.

PRC military advisors began assisting the Viet Minh in July 1950. PRC weapons, expertise, and laborers transformed the Viet Minh from a guerrilla force into a regular army. In September 1950, the United States created a Military Assistance and Advisory Group (MAAG) to screen French requests for aid, advise on strategy, and train Vietnamese soldiers.^[49] By 1954, the United States had supplied 300,000 small arms and spent US$1 billion in support of the French military effort and was shouldering 80 percent of the cost of the war.

There were also talks between the French and Americans in which the possible use of three tactical nuclear weapons was considered, though how seriously this was considered and by whom are even now vague and contradictory. One version of plan for the proposed Operation Vulture envisioned sending 60 B-29s from U.S. bases in the region, supported by as many as 150 fighters launched from U.S. Seventh Fleet carriers, to bomb Viet Minh commander Vo Nguyen Giap's positions. The plan included an option to use up to three atomic weapons on the Viet Minh positions. Admiral Arthur W. Radford, Chairman of the U.S. Joint Chiefs of Staff, gave this nuclear option his backing. U.S. B-29s, B-36s, and B-47s could have executed a nuclear strike, as could carrier aircraft from the Seventh Fleet.

U.S. carriers sailed to the Gulf of Tonkin, and reconnaissance flights over Dien Bien Phu were conducted during the negotiations. According to Richard Nixon the plan involved the Joint Chiefs of Staff drawing up plans to use 3 small tactical nuclear weapons in support of the French. Vice president Richard Nixon, a so-called "hawk" on Vietnam, suggested that the United States might have to "put American boys in".^[54] President Eisenhower made American participation contingent on British support, but London was opposed. In the end, convinced that the political risks outweighed the possible benefits, Eisenhower decided against the intervention.

The Viet Minh received crucial support from the Soviet Union and PRC. PRC support in the Border Campaign of 1950 allowed supplies to come from PRC into Vietnam. Throughout the conflict, U.S. intelligence estimates remained skeptical of French chances of success.

The Battle of Dien Bien Phu marked the end of French involvement in Indochina. The Viet Minh and their mercurial commander Vo Nguyen Giap handed the French a stunning military defeat, and on May 7, 1954, the French Union garrison surrendered. At the Geneva Conference the French negotiated a ceasefire agreement with the Viet Minh. Independence was granted to Cambodia, Laos, and Vietnam.