Murong De, who had by 405 has established Southern Yan and become its emperor, has become aware that Murong Chao is being detained in Chang'an, and sends secret messengers to encourage him to flee to Southern Yan.

Murong Chao, not daring to tell even his mother and wife, flees to Southern Yan.

On the way, he passes through the territory of the general Murong Fa, the governor of Yan Province (modern western Shandong), and Murong Fa, believing that he is not truly of imperial descent, disrespects him, leading Murong Chao to bear grudges against Murong Fa in the future.

Murong De is greatly pleased when Murong Chao arrives at the capital, Guanggu (in modern Qingzhou, Shandong), and Murong Chao presents him the golden knife that Murong De had left Lady Gongsun before leaving.

Murong De mourns his mother and brother greatly, but creates Murong Chao to be the Prince of Beihai—the same title that Murong Na had held.

As Murong De has no surviving sons, he considers Murong Chao his probable heir, and he selects talented men to be Murong Chao's assistants.

Murong Chao, at this time, is described to be a careful servant to his uncle and appropriate in all his outward actions, leading the officials and the populace to be happy with him.

In autumn 405, Murong De falls ill, and considers creating Murong Chao crown prince.

During the discussion, an earthquake occurs, and Murong De, taking the earthquake as a bad omen, temporarily terminates the discussion, but his illness grows worse during the night, and he is no longer able to speak.

His wife Empress Duan Jifei asks him whether Murong Chao should be summoned and created crown prince, and Murong De nods, so Murong Chao is created crown prince.

Murong De dies that night, and the next day, Murong Chao takes the throne as emperor.

He honors Empress Duan as empress dowager.

However, Murong Chao immediately shows himself to be capricious and unwilling to listen to criticism.

He immediately makes one of his associates, Gongsun Wulou, a major general, despite Gongsun's commonly perceived lack of qualifications, and he disassociates himself from the officials Murong Zhong, the Prince of Beidi, and Duan Hong, whom Murong De had entrusted with great responsibilities.

He is further described as being surrounded by flatterers and engaging his time on hunting and tours, refusing all advice against doing so.

Moreover, he wishes to restore punishments that include facial tattooing, cutting off noses, cutting off feet, and castration, but in the face of popular opposition, he does not carry out these actions.

He is also described as imposing heavy tax and labor burdens on the people.

Murong Chao sends his official Feng Kai to Later Qin in 407 to negotiate to have Yao Xing turn his mother and wife over to him.

Yao Xing demands that he submit as a vassal and further gives Later Qin either the court musicians of Former Qin (who had, after much travels, settled down in Southern Yan by this point) or one thousand captives from Jin.

Murong Chao readily agrees to be a vassal, but hesitates at both alternative demands.

Eventually, in fear of retaliation from Jin, he chooses to turn over one hundred and twenty musicians.

Yao Xing then delivers his mother Lady Duan and wife Lady Huyan to him.

Murong Chao honors Lady Duan as empress dowager in 408, and creates Lady Huyan empress.

Daxi now approaches Hulao and Luoyang.

Meanwhile, Emperor Mingyuan also sends the generals E Qing, Lü Dafei, Pu Ji, and Yizhan Jian east, capturing several prefectures in modern western Shandong.

However, while other cities in Song's Qing Province (modern central and eastern Shandong) fall as well, the Northern Wei forces are unable to capture the capital of Qing Province, Dongyang (in modern Qingzhou, Shandong), and are eventually forced to withdraw after food supplies run out and a large number of soldiers grow ill.