Government troops have pushed the rebels back
The BBC's Jonathan Paye-Layleh entered the town, which lies about 160 kilometres north-east of the capital, Monrovia, with Liberian troops.
Government forces say they had killing more than 120 Liberians United for Reconciliation and Democracy, Lurd, rebels when they retook the town.
Our correspondent says that on Thursday night, fighting was continuing a further 90km to the north, in Lofa County.
He said there has been widespread destruction in Gbarnga, with many homes looted.
The international relief agency, Medicins Sans Frontiers, says 44,000 people have been displaced by the recent fighting in Liberia.
Dead dogs
In Gbarnga, General Roland Duo, said of the rebels: "We've kicked them out of central Liberia entirely."
Pick-up trucks loaded with jeans-clad Liberian soldiers brandishing AK-47s and rocket launchers sped around in the streets.
Shots sounded all around town, the army apparently showing that it was back in control.
The town's main road, Broad Street, is littered with the bodies of dead dogs, and is reduced to a row of empty shops, reports the French news agency, AFP.
The police have been deployed to stop civilians looting whatever was left by the rebels.
Gbarnga had been a base of President Taylor, then a warlord, in Liberia's 1989-96 civil war.
It is considered symbolically as well as strategically important to the government.
First visit
Liberia's first lady, Jewel Taylor, also visited the town on Thursday, visiting a refugee camp.
Gbarnga was the scene of her lavish marriage to Charles Taylor.
The government has faced an insurgency in the north since mid-2000, and in recent months Lurd rebels have pushed towards Monrovia.
Liberia accuses Guinea of backing the Lurd - an accusation denied in Conakry.
In February, Mr Taylor declared a state of emergency as the fighting created thousands of refugees.
The Liberian army is being hampered by a United Nations arms embargo imposed a year ago to counter Mr Taylor's support for Sierra Leone's rebel Revolutionary United Front.
The UN Security Council voted unanimously this month to renew the sanctions, which also include a travel ban on Liberia's leaders and a ban on diamond sales.