Major-General Dai Anlan the divisional commander, decided the city of Toungoo itself would be the main defensive position of the Chinese forces, with an outpost line to the south at Oktwin.

The cavalry regiment plus a company of infantry pushed up to Kan River, with a platoon of cyclists taking up position near the bridge at the village of Nyaungchidauk.

The 143rd Regiment, with the aid of friendly local Burmese, used the cover of the jungle and wooded area to the west of the city to advance six kilometers to the north and attack Toungoo airfield and a nearby rail station.

Divisional Headquarters moved from the city to the eastern bank of the Sittang to avoid Japanese air and artillery attacks, and also to safeguard the remaining supply route to the east.

Part of a Replacement Regiment which had arrived the previous day was posted on the eastern bank of the Sittang River, to extend the positions to cover the supply line as well as the divisional HQ.

The counterattack failed to recover the lost positions when Japanese troops made good use of the buildings and the stone walls around a local cemetery.

During the bombardment the Chinese hid in their camouflaged positions then held their fire until the Japanese advanced and were within 40–50 meters and then opened up on them with machine guns and grenades.

This happened repeatedly and by the end of the day the 200th Division had very heavy casualties, but the Japanese also suffered heavily and were finding it hard to continue the frontal attacks.

The Japanese continued to press their attacks with this air support, and in the afternoon fired large numbers of tear gas shells.

Crossing at 2000 the same day, it forded the Sittang at Wagyi, a few kilometers south of the city where the water was only chest high, leaving its vehicles behind.

The divisional commander personally organized the defence, and two companies from the 3rd Battalion of the 598th Regiment were ordered to attack the exposed left flank of the Japanese.

Covered by the fight to the west, the Reconnaissance Regiment of the 56th Division moved north and attacked the Chinese flank guard east of the river and by midday on the 29th had overrun it.

On the afternoon of March 29 orders came for the entire 200th Division to withdraw that evening towards the east initially, then to the north along the eastern bank of the River Sittang.

By 2200 on March 29, 56 Division's motorized Reconnaissance Regiment had closed in on the bridge over the Sittang River and noted signs of wavering in the Chinese forces as night fell.

Dai Anlan had each Chinese battalion leave a rearguard which launched night attacks to cover the withdrawal of the main force.

Subsequently, the Chinese withdrew to a new defensive positions at Yedashe, to continue to block the Japanese advance up the Sittang River Valley.