Then Trooper Donaldson was a member of the Special Air Service Regiment (SASR) when he exposed himself to enemy fire to protect injured troops and then rescued an interpreter under heavy enemy fire in the Battle of Khaz Oruzgan during Operation Slipper, the Australian contribution to the War in Afghanistan.

[5] During his deployment to Afghanistan, he was slightly wounded on 12 August 2008 when the Bushmaster protected mobility vehicle he was travelling in struck an improvised explosive device.

Donaldson deliberately exposed himself to fire from the Taliban fighters in order to draw their attention away from the casualties, allowing them to be moved to cover.

[9] Donaldson then became the first recipient of the Victoria Cross for Australia on 16 January 2009; he was presented with the medal by the Governor-General at a ceremony in Government House, Canberra.

[5][9] The official citation was published in a special edition of the Commonwealth of Australia Gazette of 20 January 2009 and states (in part) that the award was made for " ... most conspicuous acts of gallantry in action in a circumstance of great peril in Afghanistan, as part of the Special Operations Task Group during Operations SLIPPER, Oruzgan province, Afghanistan.

[15] On 11 November 2009, Donaldson and British VC recipient Johnson Beharry handed a wreath to the Queen during a service in Westminster Abbey which marked the deaths in 2009 of the last three veterans of the First World War resident in the United Kingdom, Bill Stone, Henry Allingham and Harry Patch.

[16][17] While Donaldson was in London, news emerged in Afghanistan that Sarbi, an explosives detection dog that was declared missing in action after the 2 September ambush, had been found alive and well by an American soldier.

[18][19] Donaldson said of the news that it "closed a chapter in their shared history" and "She's the last piece of the puzzle ... Having Sarbi back gives some closure for the handler and the rest of us that served with her in 2008.

[21] In a May 2014 interview with the Australian Financial Review's Christopher Joye, Donaldson disclosed that he had been shot in the leg during a contact in Afghanistan: "This 35-year-old 'shooter' has also been clipped through his left hamstring, where a slug remains to remind him of why he should never have traversed a track while a Taliban carrying night-vision goggles zeroed in with an AK-47."

He also spoke about killing terrorists: "Pressed on the burden of taking another life, he says that rubbing out bad guys in "gun fights" – a notably "more personal experience than dropping bombs from jets" – is just a "part of the job".

That evening, at a public event on the lawns of Parliament House in Canberra, the Prime Minister (Kevin Rudd) and the National Australia Day Council Chair (Adam Gilchrist) presented Donaldson with a handmade glass award and praised his achievements.