In its first deployment between 1939 and 1941, its main assignment was the defense of the Franco-German border during the Phony War and the Western Campaign, after which it was moved to East Prussia to become Army Group North.

The only commander of the army group throughout its first tenure of service was Wilhelm Ritter von Leeb,[1]: 42  who had been reactivated from retirement upon the outbreak of the war.

[2]: 52 Between September 1939 and June 1940, Army Group C was deployed to the country's western frontier (mainly to the Franco-German border) to guard the German rear during the Invasion of Poland and Unternehmen Weserübung by other parts of the German armed forces.

The French side, once faced with the more formidable German static defenses along the Siegfried Line, failed to follow up on their offensive in any meaningful way, causing a prolonged lull in combat along the frontline.[3]: 9f.

While the primary attacks against France (to begin on 10 May 1940) were to be carried out by Army Group C's northern neighbors (Case Yellow, Case Red), the command of Army Group C was tasked in February 1940 with the conceptualization of a potential breakthrough attempt against the French fortifications along the border (the "Maginot Line").

Its immediate predecessor formation, from which the initial staff personnel had been drawn, was the staff of Supreme Commander South (German: Oberbefehlshaber Süd) of the Luftwaffe, previously tasked with the support of the Italian Comando Supremo against the Allies in the Mediterranean theater.