Gun battles erupted and Humvees rolled through the city as Afghan security forces, who had retreated to the outlying airport after the fall, began a counter-strike backed by reinforcements.
The Taliban had captured government buildings and freed hundreds of prisoners yesterday, raising their trademark white flag throughout the city.
The stunning fall of the provincial capital, which has sent panicked residents fleeing, dealt a major blow to Afghanistan's NATO-trained security forces and highlighted the insurgency's potential to expand beyond its rural strongholds.
The strike was carried out to "eliminate a threat to Afghan and coalition forces", the statement added.
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Despite the launch of the counter-offensive, Kunduz swarmed with Taliban fighters racing stolen police vehicles and Red Cross vans.
Deputy Interior Minister Ayoub Salangi said earlier that security forces were ready to retake the city and vowed to investigate how the Taliban managed to seize a major urban centre for the first time in 14 years.
The defence ministry today claimed that the police headquarters and city prison had been retaken, after marauding insurgents freed hundreds of prisoners including some Taliban commanders.
"We are scared of leaving our homes, scared of being beaten by the Taliban," said Sadiqa Sherza, head of Roshani Radio, a Kunduz media network focused on women's issues.
"There's no electricity, no water, and ration shops are all closed."
The United Nations and other aid agencies were forced to pull their staff from the city, which has seen a huge influx of civilians displaced by recent months of fighting.
The Taliban's incursion into Kunduz, barely nine months after the NATO combat mission concluded, raises troubling questions over the capacity of Afghan forces as they battle militants largely on their own.