It was originally raised in 1916 for service during the World War I and took part in the fighting in the trenches of the Western Front in France and Belgium and was disbanded in 1918.

The 37th Battalion was originally raised in Seymour, Victoria, in February 1916 as part of an expansion of the Australian Imperial Force (AIF) which took place following the end of the Gallipoli campaign.

[3] The unit was made up from personnel drawn from men originating from Victoria who were recruited from a number of areas including Melbourne, Gippsland and the north-eastern parts of the state.

Under the command of Lieutenant Colonel Frederick George Woods, the battalion became part of the 10th Brigade attached to the 3rd Australian Division.

[5][6] The process took a considerable period of time and as such it was not until late in the year that the 3rd Division was declared ready to be deployed to the Western Front.

[8] After winter had subsided, in April 1917 the 3rd Division was moved to the Messines–Wytschaete Ridge section of the line in Belgium, where they began to prepare to take part in their first major battle of the war.

[4] In early 1918, the collapse of the Russian resistance on the Eastern Front enabled the Germans to transfer a large number of troops to the west.

[16] As a result, the 37th Battalion was re-raised at this time, drawing personnel from parts of the 24th, 46th and 37th Infantry Regiments and the 29th Light Horse,[15] and was assigned to the 10th Brigade, which was attached to the 3rd Division.

[15] At the outbreak of World War II in September 1939, the 37th Battalion was headquartered around Sale,[25] in Victoria, where it formed part of the 10th Brigade.