Osbourne walked out for good (or was fired, depending on whom you ask) following the album's release, and oddsmakers would have been forgiven for betting against Osbourne or Black Sabbath from ever being heard from again. Regarding Sabbath, it seemed inconceivable that anyone could sing the songs that Osbourne had brought so much personal drama to. In Osbourne's case, he was simply too much of a maverick, out of control, to seem a likely candidate to begin a fresh new career and make it succeed. With heavy metal seemingly in its death throes, replaced by punk and new wave, it seemed likely that all concerned were washed up.

Hoping for a last minute cash-in, the band's label released a live album in England, Live At Last, recorded with Osbourne sometime around 1976; the album reached the top-5 in England, proving an audience still existed for the band. The album however was released without the band's permission, and after some legal wrangling, it was withdrawn. Though it dates from after the band's peak, it is a good document; the band sticks to most of their well-known songs, and deliver them with a faster, more urgent pace. Still, it was a lineup that no longer existed, and the future didn't look good.

However, Sabbath never said die, and dutifully hired a new lead singer, Ronnie James Dio (ex-Rainbow). Keyboardist Geoff Nichols was also added to flesh out the band's sound, and give it some of that progressive tint Iommi wanted. The band played some well-recieved gigs as a warm up, and recorded their first album with the new lineup, Heaven and Hell, released in April 1980. Having Dio on board definitely re-energized the band; Iommi and Butler shine, and tracks like "Neon Knights" and the epic "Children of the Sea" were potent enough to capture the imaginations of younger listeners who has missed the band's peak. This propelled the album into the top-10 in England and yielded two hit singles. In the U.S., where the band's fortunes had declined more precipitously, the album also was a solid comeback; it reached #28, and topped a million copies sold, their best showing in years.

Ward temporarily left the band after Heaven and Hell due to ill health, and was replaced by drummer Vinnie Appice.

Meanwhile, Osbourne was busy getting his life back in order. Having met and married new manager Sharon Osbourne, he set about on his solo career, assembling a solid band including drummer Lee Kerslake (ex-Uriah Heep), bassist Bob Daisley (ex-Rainbow), and hotshot young guitarist Randy Rhodes (ex-Quiet Riot). Rhodes was the masterstroke. One of the most promising new guitarists to emerge in the late 70's, Rhodes could play lighting fast, and in a style completely his own. This lineup recorded Osbourne's solo debut, Blizzard of Ozz in 1980, and went on the road to push it. The album represents Sabbath as Ozzie saw it; no-frills heavy metal, with the black magic, drugs and insanity back in the lyrics, and a streamlined 1980's sonic assault. Miraculously, the concept worked; Blizzard of Ozz stands not only as a triumph, but largely due to Rhodes, a stepping off point for the 1980's metal revival, one that saw the form brought back from the edge of extinction. The album peaked at #21, outselling the revitalized Black Sabbath's effort.

Directly on its heels, the band returned for a follow-up, Diary of a Madman, which not only solidified their sound, it helped establish Ozzy's post-Sabbath image as half-wildman half-lunatic. The album does sound rushed, which it was; it had to be finished before a scheduled tour. But its best moments, including the triumphant "Flying High Again" easily matched anything on the debut, which it outsold, reaching #16 on the charts. A wildly successful tour commenced, and for the first time in years, Ozzy Osbourne was a rock hero again, bigger than ever. His offstage and onstage antics grew larger than life too, guaranteeing him a lot of press.

Black Sabbath, with Appice on the drums, came up with Mob Rules in late 1981, again with Dio at the helm. Produced by Martin Birch, who had just finished working with the up-and-coming Iron Maiden, the album is given a punchier, more contemporary sound than any Sabbath album yet; Dio's magical fantasy lyrics fit right into the sceme of things, too. Still the album sounded more like a retread of its predecessor, and failed to build on the band's reviving fortunes. It did make the top-20 in the U.K., but reached only #29 in the States, about the same as the previous album.

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