In the 1920s, Chinese Nationalists under the leadership of Chiang Kai-Shek worked to re-unify China

On 6 April 1936, Zhang met with CPC delegate Zhou Enlai to plan the end of the Chinese Civil War. KMT leader Chiang Kai-shek at the time took a non-aggressive position against Japan and considered the communists to be a greater danger to the Republic of China than the Japanese, and his overall strategy was to annihilate the communists before focusing his efforts on the Japanese. He believed that "communism was a cancer while the Japanese represented a superficial wound." However, growing nationalist anger against Japan made this position very unpopular, leading to Zhang's action against Chiang known as the Xi'an incident.

On 12 December 1936, Zhang and Gen. Yang Hucheng kidnapped Chiang and imprisoned him until he agreed to form a united front with the communists against the Japanese invasion. After the negotiations, Chiang agreed to unite with the communists and drive the Japanese out of China. When Chiang was released, Zhang chose to return to the capital with him. However, once they were away from Zhang's loyal troops, Chiang had him put under house arrest. From there he was always watched and lived near the Nationalist capital, wherever it moved to.