Labazanov was born in internal exile in Kazakhstan in 1967 in the Chechen family of a teyp Nohch-Keloy (clan). He became an Eastern martial arts expert and served in the Soviet Red Army as a physical training instructor. After leaving the army, he became known as a flamboyant, charismatic and extremely violent gangster. In 1990, he was convicted of murder in Rostov-on-Don and sentenced to death before escaping from prison in 1991. According to himself, he actually escaped from Grozny pretrial detention center: "During the 1991 coup, I freed the whole prison, nearly 600 men, ahead of time. They obeyed me."
Since 1992, Labazanov aligned closely with the Chechen President Dzhokhar Dudayev, eventually becoming the chief of Dudayev's personal Presidential Guard and holding a rank of captain in the Chechen National Guard (in 1992–1993 he had been also been engaged in illegal arms trade) before failing out with him after a year-and-half during the 1993 Chechen constitutional crisis. After a bloody two-day clash between his followers and allies, including Chechen mafia boss Nikolay Suleimanov, and Dudayev's loyalists in the centre of the Chechen capital Grozny on June 13–14, Labazanov fled the city and promptly declared a blood feud against Dudayev for the death of his relative (either a brother or a cousin), whose head was publicly displayed among the heads of three other Labazanov's henchmen.
Labazanov then joined Umar Avturkhanov and the other criminal leader and one-time Dudayev supporter Beslan Gantamirov (the ex-mayor of Grozny) in the anti-Dudayev opposition, called the Chechen Provisional Council, operating as commander of his own paramilitary outfit, the Niiso (Justice) movement, partially controlling the Shalinsky and Vedensky districts of southern Chechnya. Labazanov assumed a role of a "Chechen Robin Hood", a self-styled defender of the people against the oppressive authorities. His private army of about 200 men, mostly former convicts like himself, was based in and around the town of Argun and supplied with T-72 tanks and other heavy weapons provided by the Russian special services. They also provided personal security and other armed men for Ruslan Khasbulatov (freshly released from Russian prison following his defeat in the 1993 Russian constitutional crisis), and his abortive "peacemaking" initiative.
In the summer of 1994, Chechnya descended into a fierce civil war-style conflict between the Chechen government and the opposition forces. For the first two months the clashes were sporadic, but on September 4, Dudayev's forces attacked Labazanov's stronghold of Argun and after a fierce all-night battle during which dozens of fighters were killed on both sides succeeded in dislodging him out of the city. The fighting culminated in the November 26 attempted raid on Grozny by the Chechen opposition supported by the covert Russian federal forces, which resulted in the final defeat for the Provisional Council and the open intervention by Moscow. During the subsequent First Chechen War of 1994-1996, Labazanov sided with the invading Russian federal forces and promptly was given the rank of colonel in the Russian internal security service FSK (soon to be reorganized into the FSB).
On June 1, 1996, it was reported that Labazanov was slain together with a bodyguard at the village of Tolstoy-Yurt, 15 kilometres north of Grozny. He was reportedly gunned down at point-blank range in his fortified castle-like house, where he has been living with his three wives, apparently killed by one of his own men. The Russians quickly implicated the Chechen separatist field commander Shamil Basayev in the killing. According to another version, Labazanov fell victim to blood vengeance by the relatives of a killed Chechen police officer.
- Sebastian Smith, Allah's Mountains: The Battle for Chechnya, 2006, p. 15
- Stockholm International Peace Research Institute and United Nations Research Institute for Social Development, Ethnicity, Nationalism and Conflict in and after the Soviet Union, 1997
- James Hughes, Chechnya: From Nationalism to Jihad, 2007
- Special to Moskovskiye Novosti: SECOND OPPOSITION LEADER, RUSLAN LABAZANOV, EX-CONVICT AND FORMER HEAD OF PRESIDENT'S BODYGUARDS, RECOUNTS SPLIT WITH DUDAYEV, CALLS CHECHNYA'S FEUD WITH RUSSIA NEEDLESS, Moskovskiye Novosti, August 1994
- John B. Dunlop, Russia confronts Chechnya: roots of a separatist conflict, 1998
- Mirosław Kuleba, Niezłomna Czeczenia, 1997
- Tracey C. German, Russia's Chechen War, 2003
- Svante E. Cornell,Small Nations and Great Powers: A Study of Ethnopolitical Conflict in the Caucasus, 2001
- Hughes, James, Chechnya: The Causes of a Protracted Post-Soviet Conflict, 2001
- Anatol Lieven, Chechnya: Tombstone of Russian Power, 1998
- Robert Seely, Russo-Chechen conflict, 1800-2000: A Deadly Embrace, 2001
- The Search for Peace in Chechnya: A Sourcebook 1994-1996, John F. Kennedy School of Government
- Labazanov Killed, Basayev Implicated, ITAR-TASS, 06-01-1996
- Tishkov, V. A. (1997). Ethnicity, nationalism and conflict in and after the Soviet Union : the mind aflame. London Thousand Oaks, Calif: Sage. p. 108. ISBN 978-0-7619-5185-8.
- Joseph Laurence Black, The Russian Federation, 1998