The battalion was formed on 29 December 1941 at Burnham Camp, near Christchurch, under the command of Lieutenant Colonel A. H. L. Sugden,[Note 1] a member of the New Zealand Staff Corps, in response to Japan's entry into the war following the bombing of Pearl Harbor and the invasion of Malaya.

[2] With the possibility of a Japanese advance south through the Pacific, the New Zealand Government decided to raise a force of three infantry battalions to bolster the garrison in Fiji.

Sugden had previously been commandant of the Army School and was familiar with most of the graduates of the recent officer cadet training units.

After stopping briefly at the New Hebrides, it arrived at Guadalcanal on 27 August and spent a month here, establishing camps and conducting patrols to monitor for any surprise landings by the Japanese.

[13] The southern part of the island was held by the United States Army while the Japanese continued to hold coastal positions in the north.

[15] After an initial landing was made on 21 September at Paraso Bay and the area secured over the next two days, the New Zealanders moved to Doveli Cove and then onto Boro.

It initially set up company camps along the northern coastline to keep watch for any attempts to land Japanese from nearby islands.

[22] They were largely free from interference from the Japanese although in December a transport barge was strafed by American fighter planes in an incident of friendly fire.

[23] In mid-February 1944, the 37th Battalion, as part of 14th Brigade, was involved in the Battle of the Green Islands, codenamed Operation Squarepeg.

[31] However, the 37th Battalion remained on Nissan Island until 15 June 1944 at which time it boarded the American cargo ship Rotanin for New Caledonia.

[32] It remained in New Caledonia for several weeks and during this time, most of the battalion's long serving personnel returned to New Zealand[33] with the rest following in August.

Four personnel, including Sugden, were mentioned in despatches and the battalion's quartermaster was appointed a member of the Order of the British Empire.

[37] For its service in the war, the 37th Battalion received four battle honours: "Solomons", "Vella Lavella", "Green Islands", and "South Pacific 1942–44".