Wartime exigencies broke down previous resistance to the enlistment of non-Europeans in the armed forces, with the threat posed to Northern Australia by the Japanese from late-1941 resulting in the formation of a number of Aboriginal and Torres Strait Islander units such as the Torres Strait Light Infantry Battalion.

In Northern Australia several irregular units were subsequently formed to utilise the local knowledge and bushcraft skills of the local Aboriginal people to provide surveillance of the more remote parts of the coastline, including the 2/1st North Australia Observer Unit based in Katherine, Northern Territory.

[1] Proposed in mid-1941, the NTSRU was subsequently formed between 12 February and 19 March 1942[2] under the command of Squadron Leader Donald Thomson, an anthropologist before the war with extensive experience working with the local Yolngu people in the 1930s, several of whom had previously been jailed for killing five Japanese pearlers and three Europeans during the Caledon Bay crisis in 1932–33.

[3] NTSRU personnel included 50 Aboriginal men (such as the Yolngu elder Wonggu and his sons), six Solomon Islanders, a Torres Strait Islander and several white non-commissioned officers, the unit patrolled the coast of Arnhem Land during 1942–43 searching for signs of Japanese landings and trained to fight as guerrillas using traditional weapons in the event of an invasion while reporting on enemy movements towards Darwin.

[1] Thomson did not arm the members of the NTSRU with rifles as he believed that this would expose them to identification and retaliation by Japanese forces in the event of an invasion.