Originally formed with the intention of service on the Eastern Front, this did not eventuate, and the division was used in anti-Partisan operations in the territory of the Independent State of Croatia (NDH) until the end of the war.

The largest element was the 369th Croatian Reinforced Infantry Regiment, which was part of the 100th Jäger Division, but was decimated at Stalingrad in January 1943.

[10] This was followed by Operation Drežnica, a push through to the coast, forcing passes through the Velika Kapela mountain range, part of the Dinaric Alps.

The 847th Infantry Regiment spread out along the coastline between Karlobag and Crikvenica, and supported by elements of the divisional artillery and pioneers they began building fortifications against a feared Allied invasion.

The supply situation quickly became difficult due to Partisan interdiction of the route from Karlovac and Allied bombing of coastal shipping and Senj harbour.

[11] In late February or early March the 847th Regiment, supported by an Ustaše battalion, advanced on Plaški (south of Ogulin) when they were stopped by deep snow.

In the same month, the 846th Regiment conducted an operation in the Gacka river valley around Otočac, and assisted the Croatian Home Guard in enforcing conscription orders on their own population in the divisional area.

Through the spring of 1944, the 846th Regiment used jadgkommandos, lightly armed and mobile "hunter teams" of company or battalion strength, to conduct follow-up of sightings of Partisans, and transport moving through the Kapela Pass had to travel in convoy for security.

The division was able to restore a land connection with the NDH garrison of Gospić which had been reliant on supply from the sea since the Italian surrender, and drove three Partisan battalions out of the outskirts of Otočac.

[15][b] The Germans identified that the Partisan 13th Assault Division was using the Drežnica valley as a huge armoury, hiding captured Italian arms and ammunition in villages, basements, and even in fake graves in cemeteries.

[18] In response, Mickl planned Operation Morgenstern (Morning Star) to clear Partisan forces from the Krbavsko Polje region around Udbina.

[20] The division saw action against the Partisans until the end of the war,[3] often fighting alongside a grouping of Ustaše units that numbered up to 12,000 troops.

Some of the remaining Croat members of the division were killed while the LXXXXVII Army Corps attempted to push through, but the formation lacked the strength to achieve its objective.

As a result, on 5 May 1945, Generaloberst[c] Alexander Löhr, Commander-in-chief Southeast Europe, authorised the LXXXXVII Army Corps, including the 392nd Division, to surrender.

For several days the disarmed German troops of the Corps were allowed to travel towards Germany, but on 12 May the Partisans decided to make them prisoners of war.

On 3 April 2009, the Croatian Helsinki Committee for Human Rights announced that mass graves containing the remains of approximately 4,500 members of the division had been discovered near Zaprešić.