Clashes between the group, armed with heavy weapons, and Afghan security forces on Tuesday left at least 25 members of the forces and five civilians dead, according to Abdul Basir Salangi, governor of Farah province.
At least 300 Taliban fighters were also killed in the clashes, Salangi said.
The city was taken back by security forces, who then conducted a clearing operation, on Wednesday.
“Farah city remains under government control, and the Afghan National Defence and Security Forces, supported by US Forces-Afghanistan airpower, are on the offensive against the Taliban,” Lieutenant-Colonel Martin O’Donnell, a coalition spokesman, said.
Farah has seen months of heavy fighting, with hundreds of police and soldiers killed and severe losses inflicted even on elite special forces units.
The Taliban control or exercise influence in 13 percent of Afghanistan’s 408 districts, according to a recent report by the Special Inspector General for Afghanistan Reconstruction or SIGAR, the US government’s top watchdog on Afghanistan.
With the fighting under way on Tuesday, Qari Yousuf Ahmadi, a Taliban spokesman, asked civilians to remain in their houses.
“Mujahideen have nothing to do with civilians, only military positions are the target,” he said in a statement, referring to Taliban fighters.
The US has boosted its assistance to the government under a new strategy announced by President Donald Trump last year, sending thousands of additional troops and advisers and stepping up air raids to support Afghan forces.