The finalization of regional borders, however, took as much as one and a half year as the Armenian community was scattered throughout Nagorno-Karabakh. The lowland part of Karabakh served as a basis for newly established uyezds of Kurdistan, Jabrayil, and Agdam 
The commission convened in July 1923 to develop the statute for the Autonomous Oblast of Nagorno-Karabakh and define borders between Lower and Upper Karabakh and between NKAO and Kurdistan. The commission ruled that the AONK statute shall be based on the 1923 Governorate Executive Committee Statute. The Autonomous Oblast of Nagorno-Karabakh incorporated a total of 169 villages of Jevanshir, Shusha, and Qubadli uyezds, not only Armenian but also Azerbaijani-populated 
This action flatly contradicted the 7 July 1923 AzCEC Decree, pursuant to which autonomy was only granted to the Armenian part of Nagorno-Karabakh.
The ad hoc commission (I. Dovlatov, M.J. Baghirov, and E. Khanbudagov) was dispatched to Karabakh on 16 September 1923 by the Central Committee Presidium's Resolution to look into the issue. Baghirov, later on, wrote in the 8 October 1923 report to the AKP(b) Central Committee:
"There is a number of Muslim (Azerbaijani) villages around Khankendi, Shusha, and Abdalar: Khalfali, Zarisli, Musulmanlar etc., with a total population up to 8,000 people. It seems they had better be administrated from Abdalar rather than Khankendi. This entire area was incorporated, alongside Shusha with its nearly 10,000 population (also Muslims (Azerbaijanis) in Khankendi only because there is a single Armenian village with an Armenian population of about 1,150 people, Kaladarasi, among them.
There is one Armenian village among as many as three dozens of Muslim (Azerbaijani) villages in Jevanshir Uyezd, so they have all been incorporated in Khankendi."
The commission reported that Armenians, who were constantly complaining about the lack of lands, were granted even Muslim (Azerbaijani) graveyard areas. Localities where a single Armenian village sat in the midst of numerous Muslim (Azerbaijani) villages were also placed under Khankendi's command 
The autonomous region's borders were therefore drawn by artificially connecting Armenian villages in Karabakh, resulting in the inclusion of Azerbaijani villages in the Armenian autonomy.
When the commission convened to resolve issues related to segregation of AONK, it ruled on 13 June 1924 to charge the People's Commissariat of Agriculture with performing land survey works in order to define unused land reserves in uyezds of Karyagin and Agdam. These activities were supposed to be completed, such that to transfer unused land reserves to AONK.
At its 16 July 1924 session, the commission reviewed the dispute between Agdam Uyezd and AONK over Khonashen area. From the earliest times, Azerbaijani villages of Khojalan, Khojaly, Mughany etc existed in this area. All of them were razed to the ground during the massacre, and their dwellers fled for their life. The lands were subsequently taken over by Armenians from other villages that had nothing to do with Khonashen. The commission, however, chose not to elaborate on these "fine details", and gave the area away to AONK. 
Pursuant to the "Statute of Autonomous Oblast of Nagorno-Karabakh", which was published on 26 November 1924, the towns of Shusha and Khankendi alongside 115 villages were transferred from Shusha Uyezd to AONK, 52 villages were transferred from Jevanshir Uyezd, 30 from Karyagin Uyezd, and Kaladarasi village from Qubadli Uyezd 
Compared to the July 1923 statute, the number of villages transferred to AONK rose from 169 to 198.
According to 1924 report of the Azerbaijan Statistical Committee, there had been over 200 such localities by the end of the reporting period 
In consideration of administrative and territorial division in districts in question, the Committee used the 1921 agricultural census data to register the areas of these territories alongside their national composition and other aspects.
From these data, it can be seen that Azerbaijan retained some 16 thousand square kilometers of historical lands of Karabakh (within the boundaries of the namesake khanate), including the area of the Autonomous Oblast of Nagorno-Karabakh (4160.5 km2
. But the facts confirm that, contrary to official documents, the territory of the Autonomous Oblast of Nagorno-Karabakh was continuously expanding, reaching 4,431.7 km2
as of 1 January 1933 
Adding new localities resulted in a change of count and ethnic composition of the autonomy. The regional borders were defined such that to make its Armenian population an overwhelming majority.
The 1926 census reported AONK's territory as including two towns, Shusha and Stepanakert (Khankendi until 1923), and 5 districts, Shusha, Varanda, Jerabert, Khachen, and Dizak.
When new zoning was completed in 1930, Varanda District was dissolved, and its territory was distributed between newly founded districts of Martuni and Shusha.
The territory of disbanded Khachen District was incorporated into newly established Stepanakert District.
Therefore, AONK was divided into 5 districts: Jerabert, Martuni, Shusha, Dizak, and Stepanakert (Khankendi).
When the USSR Constitution was adopted in 1936, AONK was renamed to NKAO.
In 1939, Dizak and Jerabert were respectively renamed to Hadrut and Mardakert (present-day Agdere).
In 1963, Shusha District was dissolved, and its territory included in Stepanakert District.
In 1965, however, Shusha District was reinstated.
The sixth NKAO district, Askeran, was set up in 1978 on the lands isolated from Stepanakert District. Such administrative division persisted up until the Supreme Soviet of the Republic of Azerbaijan disbanded NKAO by its 26 November 1991 resolution.
This resolution also returned historical names to Stepanakert (now Khankendi), Mardakert (Agdere), and Martuni (Khojavend).
As such, the districts of Martuni and Mardakert were respectively renamed to Khojavend District and Agdere District.
Districts of Askeran and Hadrut were disbanded, and Khojaly District set up with its center in the town of Khojaly, which received the territory of disbanded Askeran District.
The territory of disbanded Hadrut District was incorporated in Khojavend District.
The towns of Khankendi and Shusha were granted national status, and districts of Agdere, Khojavend, Khojaly, and Shusha became national-level districts 
The Supreme Soviet of Azerbaijan issued on 13 October 1992 the resolution to disband Agdere District, with its territories distributed among districts of Kalbajar, Terter, and Adgam.