[5] Mobilised in 1939, Nicholls went to France with the 2nd Battalion Coldstream Guards, but was soon posted to the Headquarters of the First Division as an Intelligence Officer to make the best use of his command of French and German.

In October 1943, by now a temporary lieutenant-colonel, he parachuted into Albania to serve as Staff Officer to Brigadier Edmund Frank "Trotsky" Davies with the task of inciting resistance to the German occupation and tying down enemy forces.

[1] Nicholls received medical attention in the city of Tirana, however he died from his wounds on 11 February 1944 at the age of 33, after managing to make a final report on the situation in Albania to British authorities.

The citation reads:[9] The King has been graciously pleased to approve the posthumous award of the George Cross, in recognition of most conspicuous gallantry in carrying out hazardous work in a very brave manner, to: — Major (temporary Lieutenant-Colonel) (acting Brigadier) Arthur Frederick Crane NICHOLLS (62269), Coldstream Guards (London).In January 1940 Nicholls married Dorothy Ann Violet Schuster, they having a daughter in 1943.

[1] Research after his death by Lance Corporal Ian Tindall found that Nicholls was also entitled to receive the Emergency Reserve Decoration.