Rebels fighting forces loyal to Libyan leader Muammar Gaddafi were in control of the key eastern oil town of Ras Lanuf on Sunday, AFP correspondents reported.
Ras Lanuf is 370 kilometres (230 miles) west of the rebel stronghold city of Benghazi and 210 kilometres from Ajdabiya, the first town to fall back into rebel hands on Saturday after a week into allied air strikes.
It had fallen to Gaddafi's forces on 12 March.
Weapons could be seen abandoned on the road and buildings were partly destroyed, indicating Gaddafi forces had retreated further west towards the Libyan leader's hometown of Sirte.
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