After Zhang Juzheng died, Wanli decided to take complete control of the government. During this early part of his rule he demonstrated himself a decent and diligent emperor. Overall, the economy continued to prosper and the country remained powerful. Unlike the 20 years at the end of his rule, Wanli at this time would attend every morning meetings and discuss affairs of state. The first eighteen years of Wanli's reign would be dominated by three wars that he dealt with successfully:

• Defense against the Mongols. In the outer regions, one of the leaders rebelled and allied with the Mongols to attack the Ming. At this time, Wanli sent out Li Chengliang and sons to handle the situation, resulting in overall success.
• Toyotomi Hideyoshi of Japan sent 200,000 soldiers in the first expedition to invade Korea. Wanli made three decisions. First, he sent a 3,000 man army to reinforce the Koreans. Second, if Koreans entered Ming territory, he gave them lodging. Third, he instructed the Liaodong area to prepare and be vigilant. In actual combat, the first 2 battles were defeats since Ming troops under Li Rusong were outnumbered and ill-prepared to fight the 200,000-strong Japanese army. Wanli then sent a bigger army of 80,000 men, with more success. This resulted in negotiations that favored the Ming. Two years later, in 1596, Japan once again invaded. However, that same year, Hideyoshi died and the Japanese lost their will to fight. Combined with the leadership of the Korean admiral Yi Sun-sin and the bogging down of Japanese forces in the Korean mainland, the Ming Dynasty defeated the demoralized Japanese army.
• The Yang Yinlong rebellion. At first, Wanli was engaged in war with Japan and sent only 3,000 troops under the command of Yang Guozhu to fight the rebellion. Unfortunately, this army was completely annihilated and Yang Guozhu was killed. When war with Japan ended, Wanli turned his attention to Yang Yinlong, sending Guo Zhizhang and Li Huolong to lead the offensive. In the end, Li Huolong defeated Yang's army and brought him back to the capital.

After these three successful conflicts, Wanli stopped going to morning meetings, going into his later reign and his final 20 years on the throne. During the latter years of Wanli's reign, he seldom attended state affairs and for years at a time would refuse to receive his ministers or read any reports sent to him. Wanli also extorted money from the government, and ultimately his own people, for his personal enjoyment. One example was the close attention he paid to the construction of his own tomb, which took decades to complete.

The Wanli Emperor then became disenchanted with the moralistic attacks and counterattacks of officials, becoming thoroughly alienated from his imperial role. Throughout the 1580s and 1590s, Wanli yearned to promote his third son (Zhu Changxun) by Lady Zheng as crown prince; however, many of his powerful ministers were opposed to the idea. This led to a clash between sovereign and ministers that lasted more than 15 years. In October of 1601 Emperor Wanli eventually gave in and promoted Zhu Changluo — later Emperor Taichang — as crown prince. Although the ministers seemed to have overpowered the emperor, Wanli finally resorted to vengeful tactics of blocking or ignoring the conduct of administration. For years on end he refused to see his ministers or act upon memoranda. He refused to make necessary appointments, and eventually became so obese he was unable even to stand without assistance. The whole top echelon of Ming administration became understaffed. In short, Wanli tried to forget about his imperial responsibilities while building up personal wealth. Considering the emperor's required role as the linchpin of the state, this personal rebellion against the bureaucracy was not only bankruptcy but treason.

Finally, the future threat of the Manchurians developed. The Jurchen area was eventually conquered by Nurhaci. Nurhaci would go on to create the Later Jin Empire which would now become an immediate threat. By this time, after 20 years, the Ming Dynasty army was in steep decline. While the Jurchens were fewer in number, they were more fierce and powerful. In the grand battle of Nun Er Chu in 1619, the Ming Dynasty sent out a force of 200,000 against the Later Jin Empire of 60,000, with Nurhaci controlling 6 banners and 45,000 as the central attack while Dai Shan and Huang Taji each controlled 7,500 troops and one banner attacked from the sides. After 5 days of battle, the Ming Dynasty had casualties over 100,000, with 70% of their food supply stolen. From this point on, the Ming Dynasty would lose its advantage to the Jurchens, setting up the eventual downfall of the Ming Dynasty to the Qing Dynasty.

In 1615 the court was hit by yet another scandal. A man by the name of Zhang Chai armed with no more than a wooden staff managed to chase off eunuchs guarding the gates and broke into Ci-Qing palace, then the Crown Prince’s living quarters. Zhang Chai was eventually subdued and thrown in prison. Initial investigation found him to be a lunatic, but upon further investigation by a more conscientious magistrate named Wang Zhicai the man confessed to being party to a plot instigated by two eunuchs working under Lady Zheng. According to Zhang Chai’s confession, the two had promised him rewards for assaulting the Crown Prince, thus implicating the Emperor’s favorite concubine in an assassination plot. Presented with the incriminating evidence and the gravity of the accusations, Emperor Wanli, in an attempt to spare Lady Zheng, personally presided over the case. He laid the full blame on the two implicated eunuchs who were executed along with the would-be assassin. Although the case was quickly hushed up, it did not squelch public discussion and eventually became known as the "Case of the Palace Assault", one of three notorious 'mysteries' of the Late Ming Dynasty.

Lady Zheng (1567? - 1630) was Wanli's favourite concubine who gave birth to Wanli's third son Zhu Changxun in 1586. Wanli was unable to promote Lady Zheng as Empress during his reign as well as his son Zhu Changxun as crown prince due to the opposition of his ministers. Wanli eventually promoted Lady Zheng as Empress on his deathbed in 1620. However, this order was never fulfilled by the officials before the fall of Ming Dynasty. In 1644, since Hongguang Emperor, the first sovereign of the Southern Ming Dynasty, was a grandson of Lady Zheng, the lady was finally promoted as Empress by the Southern Ming government, 14 years after her death.

The Wanli emperor’s reign is representative of the decline of the Ming. He was an unmotivated and avaricious ruler whose reign was plagued with fiscal woes, military pressures, and angry bureaucrats. He also had sent eunuch supervisors to provinces to oversee mining operations which actually became covers for extortion. Discontented with the lack of morals during this time, a group of scholars and political activists loyal to Zhu Xi and against Wang Yangming, created the Donglin Movement, a political group who believed in upright morals and tried to influence the government.

During the closing years of Wanli's reign, the Manchu began to conduct raids on the northern border of the Ming Empire. Their depredations ultimately led to the overthrow of the Ming dynasty in 1644. It was said that the fall of the Ming dynasty was not a result of the Chongzhen Emperor's rule but instead due to Wanli's gross mismanagement.

The Wanli Emperor died in 1620 and was buried in Dingling located on the outskirts of Beijing. His tomb is one of the biggest in the vicinity and one of only two that are open to the public. In 1997 China's Ministry of Public Security published a book on the history of drug abuse. It stated that the Wanli emperor's remains had been examined in 1958 and found to contain morphine residues at levels which indicate that he had been a heavy and habitual user of opium.

On the other hand, Emperor Wanli's contribution to the defense of the Chosun Dynasty in Korea against the Japanese invasion has endeared him to Koreans over the centuries. In the late 1990s, Koreans still paid respect to Wanli.

In many ways, he was similar to other Chinese emperors who were initially successful, but whose subsequent poor rule caused the eventual demise of their dynasties, such as Emperor Xuanzong of Tang and the Qianlong Emperor of the Qing Dynasty.