In 1392, Yoshimitsu accelerated negotiations with the Southern Court with a help of Yoshihiro OUCHI as an intermediary, as the national influence of the Southern Court was declining. In the negotiations, he presented several following proposals for reconciliation: the emperor should be selected alternately from the two imperial lineages, Jimyoin-to and Daikakuji-to; all the state-owned territories (of which there was actually very little) should belong to the Daikakuji-to; the Three Sacred Treasures which were in the possession of Emperor Go-Kameyama should be presented to Emperor Go-Komatsu of the Jimyoin-to, so that the Southern Court would be dissolved. In this way, he achieved integration of the Northern and Southern Courts, and put a stop to the 58 year split between the courts.
1392年（元中9年/明徳3年）には南朝勢力が全国的に衰微したため義満は大内義弘を仲介に南朝方と交渉を進め、持明院統と大覚寺統が交互に即位する事（両統迭立）や諸国の国衙領を全て大覚寺統の所有とする事（実際には国衙領はわずかしかなかった）などの和平案を南朝の後亀山天皇に提示し、後亀山が保持していた三種の神器を持明院統の後小松天皇に接収させて南朝が解消されるかたちでの南北朝合一を実現し58年にわたる朝廷の分裂を終結させる。