Since the revolutionary sailors defeated the regular army force sent against them, the engagement was also an important episode in the rise of the right-wing Freikorps on which the government increasingly relied.

On 15 November, the division staff moved into the Berlin Palace, the former city residence of the Hohenzollern family and Emperor Wilhelm II, while the troops were billeted in the adjoining Marstall.

It is unclear whether this was due to the fact that it failed to cooperate with the military putsch planned for 6 December and had deposed its commander who was a part of it,[3] or whether the division was an obstacle to Quartermaster General Wilhelm Groener's agreement to use the army to suppress any communist uprising.

The temporary government of the Rat der Volksbeauftragten (Council of People's Deputies) now ordered the division to move to new quarters outside of Berlin and to reduce the number of soldiers to 600 from the current level of around 1,000.

By that point, the government, the six-man "Council of People's Deputies" that had been in office since 10 November, was on the verge of breaking apart with increasing differences emerging between its USPD and MSPD members.

According to author Sebastian Haffner what happened then was as follows: The soldiers' leaders under one Lieutenant Heinrich Dorrenbach gave the keys to Emil Barth, a People's Deputy of the USPD.

Wels refused, arguing that he only took orders from Friedrich Ebert who was joint chairman of the "Council of People's Deputies" and had also been handed the authority of government by the last Imperial Chancellor, Maximilian of Baden.

On Dorrenbach's orders the troops now closed all access to the Reichskanzlei, occupied the room with the telephone switchboard and cut the lines.

[1]: 143 In response to the occupation of the Chancellery, Friedrich Ebert used a secret telephone line that did not go through the switchboard to call for help from the Oberste Heeresleitung (OHL), the High Command of the German Army, situated at that time in Kassel.

According to a different version, there had been another telephone conversation between Ebert and Groener in which the latter had threatened to end their cooperation unless stern steps were taken against the revolting unit.

The initial barrage of machine gun and artillery fire from several sides was without serious effects, except for significant damage to the buildings.

Between 9 and 10 am masses of unarmed civilians, including women and children, gathered and urged the army troops to stop fighting.

In addition, the Sicherheitswehr, part of the Berlin police force commanded by Emil Eichhorn of the USPD, as well as armed and unarmed civilians joined the division and opposed the regular troops.

[7][8] As a direct result of the confrontation, which was seen as a political defeat for Ebert, Wels had to resign his post as commander of the city's forces (Stadtkommandant).

This would lead to what has become known as the Spartakusaufstand or Spartakuswoche, but is more accurately referred to as the Januaraufstand ("January Uprising"), since it was mostly an attempt by the revolutionary workers of Berlin to repeat their feat of 9 November and to regain what they had won then and subsequently half lost.

[1]: 155 The renewed failure of regular troops—after the disintegration of the forces assembled in Berlin for the planned restoration of order on 10 to 15 December—also gave support to those within the military who argued in favour of increased reliance on hard-core volunteer troops.

[1]: 147–148  Since the middle of November, the OHL had supported the creation by some officers of so-called Freikorps, voluntary units of soldiers who were mostly nationalistic, monarchistic and anti-revolution, even while the demobilisation of the regular (conscripted) army was ongoing.

These new military forces were intended both to secure the eastern border (e.g. in Posen) and protect the newly formed Baltic states against the Red Army, but also to restore law and order within the Reich.