The Taliban has captured its first provincial capital since launching an offensive to coincide with the departure of foreign troops, a senior official confirmed.
It is being seen as a significant psychological blow to a government trying to defending a string of cities against the insurgents.
"The city of Zaranj, provincial capital of Nimroz, has fallen to the Taliban," Roh Gul Khairzad, the deputy governor, said.
She said the city - in southwest Afghanistan near the Iranian border - had fallen "without a fight", and social media showed clips of insurgents roaming the streets, being cheered by residents.
The veracity of the videos could not immediately be confirmed.
The fall of Zaranj comes the same day the Taliban claimed responsibility for killing the head of the Afghan government's media information department.
The insurgents warned just days earlier they would target senior administration figures in retaliation for increased air strikes.
The assassination of Dawa Khan Menapal, one of the government's leading voices, followed another bloody day of fighting as the war increasingly spills into the country's capital Kabul.
"Unfortunately, the savage terrorists have committed a cowardly act once again and martyred a patriotic Afghan," Interior Ministry spokesman Mirwais Stanikzai said of the death of Mr Menapal.
He was popular in Kabul's tight-knit media community, and known for attacking the Taliban on social media - even jokingly at times.
The Taliban claimed responsibility for the death, with spokesman Zabihullah Mujahid sending a message to media saying "he was killed in a special attack carried out by mujahideen".
The murder comes after the militants warned on Wednesday of more attacks targeting Afghan government leaders.
The day before, Defence Minister Bismillah Mohammadi escaped an assassination attempt in a bomb-and-gun attack.
The Afghan and US militaries have stepped up air strikes in their fight against the insurgents in a string of cities, and the Taliban said Tuesday's Kabul raid was its response.
Fighting in Afghanistan's long-running conflict has intensified since May, when foreign forces began the final stage of a withdrawal due to be completed later this month.
The Taliban already controls large portions of the countryside, and is now challenging government forces in several provincial capitals.
Government forces continue to hit Taliban positions with air strikes and commando raids, and the Defence Ministry said it had eliminated more than 400 insurgents in the past 24 hours.
Both sides frequently exaggerate battlefield casualty figures, making independent verification virtually impossible.
But even as Afghan officials claimed to be hitting the Taliban hard, security forces have yet to flush out the militants from provincial capitals they have already entered - with hundreds of thousands of civilians forced to flee in recent weeks.
Social media was also filled with videos of the devastating toll the fighting has taken in the southern city of Lashkar Gah, with posts showing a major market area in flames.
Aid group Action Against Hunger said its offices had been hit by an "aerial bomb" in the city earlier this week, according to a statement released by the organisation.
"The building was marked from the street and roof as a non-governmental (NGO) organisation, and the office location has been communicated often to the parties involved in the conflict," said the group, adding that no staff had been harmed.
In the western city of Herat, a steady stream of people are leaving their homes in anticipation of a government assault on positions held by the Taliban.
"We completely evacuated," said Ahmad Zia, who lived in the western part of the city.
"We have nothing left and we do not know where to go," he said.
UN says Afghan war has entered 'deadlier, more destructive phase'
The United Nations special envoy for Afghanistan has questioned the Taliban's commitment to a political settlement, telling the UN Security Council the war has entered a "deadlier and more destructive phase" with more than 1,000 civilians killed in the past month during the Taliban offensive.
"A party that was genuinely committed to a negotiated settlement would not risk so many civilian casualties, because it would understand that the process of reconciliation will be more challenging, the more blood is shed," Deborah Lyons said.
"This is now a different kind of war, reminiscent of Syria, recently, or Sarajevo, in the not-so-distant past.
"To attack urban areas is to knowingly inflict enormous harm and cause massive civilian casualties.
"Nonetheless, the threatening of large urban areas appears to be a strategic decision by the Taliban, who have accepted the likely carnage that will ensue," Ms Lyons said.
Peace talks between the Afghan government and Taliban negotiators started last year in the Qatari capital of Doha, but have not made any substantive progress.
Russia's UN Ambassador Vassily Nebenzia told the council that the deteriorating situation in Afghanistan was of increasing concern and "with the withdrawal of foreign forces, the outlook looks grim.
"It is clear that there is no military solution to the Afghan situation, but in the current situation - given the absence of progress on the negotiation track - the prospects of Afghanistan slipping into full scale and protracted civil war, unfortunately, is a stark reality," he said.
Senior US diplomat Jeffrey DeLaurentis urged the Taliban to halt its offensive, pursue a political settlement and protect Afghanistan's infrastructure and people.
"The Taliban must hear from the international community that we will not accept a military takeover of Afghanistan or a return of the Taliban's Islamic Emirate," he said.
Afghanistan's UN Ambassador Ghulam Isaczai urged the Security Council to act to "prevent a catastrophic situation."
"We're alarmed by reports and incidents of gross human rights violation by the Taliban and their foreign terrorist associates in almost half of our country and we are extremely concerned about the safety and security of people in cities under Taliban attacks," he said.