After the quick defeat of the Royal Yugoslav Army, Rupnik was released from German military prison and moved to Italian-annexed southern Slovenia (known as the Province of Ljubljana) on April 17, 1941.

On June 7, 1942, he accepted the position of president of the Provincial Council of Ljubljana, thus replacing Juro Adlešič as mayor under Italian annexation.

[8]: 123  Together with Anton Kokalj, Ernest Peterlin and Janko Kregar, Rupnik was also one of the founders of the Slovene Home Guard, an auxiliary military unit of the SS, formed as a voluntary militia to fight the partisan resistance movement.

For this purpose, he relied on two groups of aides: on one side, mostly apolitical civil servants and cultural functionaries active already in the Kingdom of Yugoslavia (such as Stanko Majcen and Narte Velikonja); on the other side, he involved several highly ideological and fervently pro-Nazi young individuals, such as Ljenko Urbančič and son-in-law Stanko Kociper.

In 1944, while Rupnik served as president of the Ljubljana provincial administration, the Slovene Home Guard Police arrested the remaining Jews, who until then had managed to hide in the city, and turned them over to the Nazi authorities, who sent them to Auschwitz and other concentration camps.

[12] He organized several "anti-Communist rallies", in which he delivered violent speeches against the Liberation Front of the Slovenian People, the Western Allies and the "World Jewish Conspiracy".

[7] In their oaths, the Home Guards swore to fight together with the SS and German police under the leadership of the Führer against the Communist guerillas and their allies.

In a lecture he gave in Ljubljana in 1944, entitled "Bolshevism: a tool of international Judaism" and subtitled "Jewish endeavours towards global supremacy", Rupnik stated:The Jews' straight dogmatic hatred of all who are not Jewish is finally challenged everywhere by a revolt by the home nation that sooner or later removes all parasites from their country or limits by law their economic, religious and political activity.

[15])In a lecture at Polhov Gradec, on June 5, 1944, Rupnik stated: With solid trust in the righteousness of the leader of Europe, of the German nation, we must calmly and with all fanaticism lead the battle against Jewish global supremacy serving Stalin’s and Tito’s bandits and their assistants, Anglo-American gangsters.

[20][21] In response the Simon Wiesenthal Center issued a condemnation of the annulment, stating that Rupnik "played a major role in the arrest and deportation of Jews from Ljubljana in 1943 and 1944".

[22] They further noted "This shameful decision constitutes a shocking distortion of the history of the Holocaust and a horrific insult to Rupnik's many victims and their families.