It was activated at Nanam, North Korea, during the early part of August 1949, composed of Korean veterans of the Chinese Communist 8th Route Army's 164th Division, which had been stationed in Changchun, China until July 1949.

It was followed in short order by the other two infantry regiments and on the night of June 24, the 5th Division, with the exception of a few rear echelon units still en route, was reportedly deployed along the 38th Parallel south of Yangyang.

The division's drive was allegedly supported by the 766th Independent Infantry Regiment, an organization with a strength of 1,500 men which appears to have been part of a larger amphibious force under the direct control of the North Korean Army's General headquarters in Pyongyang.

The 5th Division in two weeks of heavy battles forged its way toward Yongdok and finally captured the town on or about August 3, after sustaining prohibitive casualties.

To illustrate the terrific casualties that the division sustained in these battles, one POW related that in a single naval barrage 700 men were killed and huge stores of supplies and equipment were destroyed.

On or about August 23, 1950, American and ROK troops launched a counterattack, which forced the division to withdraw about 5 miles to the north and received such heavy casualties that its strength was reduced to about 4,000 men.

Late in the evening of the September 11, the division advanced toward the southwest, skirting the outer fringes of the UN defenses, and deployed along the high ground overlooking Pohang-dong for another assault on the town.

Since the division had been reduced to approximately 50% of its original strength by this time, it remained in this locality, reorganizing and receiving replacements totalling about 1,200 men.

On September 21, 1950, the 5th Division was hit by the full weight of the all-out UN offensive launched in coordination with the successful amphibious operation at Inchon.

Marching in groups of platoon size and maintaining intervals of about 5 miles between regiments during daytime, the division retraced its route of advance along the coast and arrived at Anbyon on about November 3, 1950.

On November 18, elements of the greatly diminished 5th Division, with a remaining strength of only 500 troops were seen passing through Sachang-ni moving in a northerly direction.