After the creation of Manchukuo and subsequent military action by the Imperial Japanese Army, which brought Northeastern China east of the Great Wall under Japanese control, the Empire of Japan and the Republic of China signed the Tanggu Truce, which established a demilitarised zone south of the Great Wall, extending from Tianjin to Beiping.

Under the terms of the truce and the subsequent He-Umezu Agreement of 1935, this demilitarized zone was also purged of the political and military influence of the Kuomintang government of China.

The Demilitarized Zone Peace Preservation Corps that had been created by the Tanggu Truce was disbanded and reorganized as the East Hebei Army with Japanese military support.

The Japanese goal was to establish a buffer zone between Manchukuo and China, but the pro-Japanese collaborationist regime was seen as an affront by the Chinese government and a violation of the Tanggu Truce.

Led by an old Taoist priest, the rebels were organized by the Yellow Sand Society and managed to defeat an East Hebei Army unit that was sent to suppress them.