Akhtar Muhammad, a police commander in Sangin district said on Thursday that insurgents captured the area around the district governor's compound overnight.
"An hour later we recaptured that building and now we have it," he told The Associated Press.
Spokesman for the Afghan army in Helmand, Guam Rasoul Zazai said airstrikes bombarded Taliban strongholds in Sangin overnight, killing 25 insurgents and wounding another 12.
Operations were slowed as insurgents began taking shelter in civilian homes, he said.
Sangin is an important prize for the Taliban. It sits on crucial smuggling routes for drugs, arms and other contraband which fund the insurgency.