The Japanese invaded and occupied the location in preparation for an overland attack on Port Moresby along the Kokoda Track.

The Japanese 17th Army's Lieutenant General Harukichi Hyakutake was tasked to conduct an offensive against Port Moresby over the Owen Stanley Range.

With the occupation of Port Moresby, it would remove the threat of air attacks against Rabaul and provide airfields to conduct raids against the bases, cities and sea lane supply lines around the north of Australia.

On 14 July, B Company of the 39th Battalion, under Captain Sam Templeton arrived at Kokoda and reinforced the PIB, that was already deployed in the area.

[3][notes 2] [notes 3] With the failure to capture Port Moresby by sea landing due to the battle of the Coral Sea and the subsequent return of the invasion force to Rabaul, the Japanese 17th Army under Lieutenant General Harukichi Hyakutake considered the possibility of an overland offensive.

Aerial reconnaissance by the 25th Air Flotilla on 27 and 30 June reported the possibility of a road between Buna and Kokoda and further south toward Isurava.

[14][notes 4] The small Australian party manning the wireless station at Buna withdrew without engaging the landing troops.

Daily raids were undertaken in the Buna-Gona area by the USAAF and Royal Australian Air Force planes.

[18][19] Templeton had returned to Kokoda, leaving Major William Watson, of the PIB, to command the forward action.

There, he destroyed the bridge and harassed Japanese as they attempted to cross the Kumusi River, before withdrawing 11 Platoon and what remained of his PIB on the afternoon of 24 July.

[20][21] Lieutenant Colonel William Owen, commanding officer of the 39th Battalion, had flown to Kokoda on 24 July and was met by Templeton.

The ambush was sprung at about midday on 25 July, killing two Japanese,[22] and the force withdrew back on Oivi, taking up a position that evening.

On the following morning, a small party of stragglers arrived, having spent the previous night at Kokoda, they reported the village unoccupied.

[26][27] The Japanese forces had managed to capture the Buna–Gona area, establishing a beachhead from which they were able to support their attack on Port Moresby.

[34] Author Peter Williams records Australian casualties in the Buna area as including six ANGAU members killed.

[36] Nine Europeans, including a sixteen-year-old girl, were executed at Buna by members of the Sasebo Special Naval Landing Party.

[37] Amongst those killed were members of the PIB, Army signallers, several US airmen and two female missionaries, May Hayman and Mavis Parkinson.

[38] A party, including the two missionaries evaded capture for a time but were ambushed in August and the survivors executed after being interrogated.