On March 25, 1970, the newly designated union orchestrated a controller "sickout" to protest many of the FAA actions that they felt were unfair, over 2,000 controllers around the country did not report to work as scheduled and informed management that they were ill. Controllers called in sick to circumvent the federal law against strikes by government unions. Management personnel attempted to assume many of the duties of the missing controllers but major traffic delays around the country occurred. After a few days the federal courts intervened and most controllers went back to work by order of the court, but the government was forced to the bargaining table. The sickout led officials to recognize that the ATC system was operating nearly at capacity. To alleviate some of this Congress accelerated the installation of automated systems, reopened the air traffic controller training academy in Oklahoma City, began hiring air traffic controllers at an increasing rate, and raised salaries to help attract and retain controllers.  

In the 1980 presidential election, PATCO (along with the Teamsters and the Air Line Pilots Association) refused to back President Jimmy Carter, instead endorsing Republican Party candidate Ronald Reagan. PATCO's refusal to endorse the Democratic Party stemmed in large part from poor labor relations with the FAA (the employer of PATCO members) under the Carter administration and Ronald Reagan's endorsement of the union and its struggle for better conditions during the 1980 election campaign.  

On August 3, 1981 the union declared a strike, seeking better working conditions, better pay and a 32-hour workweek. In doing so, the union violated a law {5 U.S.C. (Supp. III 1956) 118p.} that banned strikes by government unions. However, several government unions (including one representing employees of the Postal Service) had declared strikes in the intervening period without penalties. Ronald Reagan, however, declared the PATCO strike a "peril to national safety" and ordered them back to work under the terms of the Taft-Hartley Act of 1947. Only 1,300 of the nearly 13,000 controllers returned to work. Subsequently, Reagan demanded those remaining on strike return to work within 48 hours, otherwise their jobs would be forfeited. At the same time Transportation Secretary Drew Lewis organized for replacements and started contingency plans. By prioritizing and cutting flights severely, and even adopting methods of air traffic management PATCO had previously lobbied for, the government was initially able to have 50% of flights available.  

On August 5, following the PATCO workers refusal to return to work Reagan fired the 11,345 striking air traffic controllers who had ignored the order, and banned them from federal service for life (this ban was later rescinded by President Bill Clinton in 1993). In the wake of the strike and mass firings the FAA was faced with the task of hiring and training enough controllers to replace those that had been fired, a hard problem to fix as at the time it took three years in normal conditions to train a new controller. They were replaced initially with nonparticipating controllers, supervisors, staff personnel, some nonrated personnel, and in some cases by controllers transferred temporarily from other facilities. Some military controllers were also used until replacements could be trained. The FAA had initially claimed that staffing levels would be restored within two years; however, it would take closer to ten years before the overall staffing levels returned to normal. PATCO was decertified on October 22, 1981.  

Some former striking controllers were allowed to reapply after 1986 and were rehired; they and their replacements are now represented by the National Air Traffic Controllers Association, which was organized in 1987 and had no connection with PATCO. In 2003, Federal Reserve Chairman Alan Greenspan, speaking on the legacy of Ronald Reagan, noted: Perhaps the most important, and then highly controversial, domestic initiative was the firing of the air traffic controllers in August 1981. The President invoked the law that striking government employees forfeit their jobs, an action that unsettled those who cynically believed no President would ever uphold that law. President Reagan prevailed, as you know, but far more importantly his action gave weight to the legal right of private employers, previously not fully exercised, to use their own discretion to both hire and discharge workers.