Initially, the formation was assigned a defensive role in anticipation of a possible Japanese invasion; however, this threat subsided and eventually the army was deployed to Lae, in New Guinea, in late 1944, where it co-ordinated Australian offensives around Aitape, in New Guinea, on New Britain and Bougainville, and around Madang.

[5] During 1942 and 1943, the units under the formation's command varied, and by August 1943, they controlled the 11th Brigade at Merauke (Dutch New Guinea), Torres Strait Force at Thursday Island, the 4th Infantry Division at Townsville, the 3rd Armoured Division at Murgon, and the 2nd Australian Corps on the Atherton Tablelands, around Barrine, in Queensland.

While the main elements of the First Australian Army had been deployed forward to Mareeba, the formation had maintained a rear headquarters at Chermside, Queensland.

This headquarters administered several minor units in Brisbane until September 1944, when they came under the control of the Second Australian Army.

[9] In October 1944, the main element of the army's headquarters moved under Lieutenant General Vernon Sturdee, to Lae, in the Australian territory of New Guinea, where it was tasked with undertaking operations across a broad area including Bougainville, New Britain and Aitape.