While the Division was originally to be deployed to North Africa in late 1941, it was retained in Australia following the outbreak of the Pacific War.

The decision to form the 1st Armoured Division was inspired by the success of mass tank tactics in Europe during the early stages of World War II.

[9] These plans were, however, dropped in early December 1941 when it was decided to retain the division in Australia to defend against the feared Japanese landings on the Australian mainland.

[10] As an emergency measure the division's armoured regiments were equipped with Bren Carriers until sufficient tanks arrived.

By this time, there was a manpower shortage in the Australian Army, which required a re-allocation of personnel and the gradual reduction of Australia's armoured units.

In September 1942, the 2/6th Armoured Regiment, equipped with M3 Stuart light tanks, was deployed to New Guinea, and subsequently saw action during the Battle of Buna–Gona.