It was formed following the declaration of war on Nazi Germany, with an initial strength of one infantry division and related auxiliary components.

Under the Defence Act 1903, neither the part-time Militia nor the full-time Permanent Military Force (PMF) could serve outside Australia or its territories unless they volunteered to do so.

[1] On 15 September 1939, Menzies announced the formation of the Second AIF, an expeditionary force of 20,000, to consist of one infantry division and any auxiliary units that the Australian Army could fit into it.

On 15 November 1939, Menzies announced the reintroduction of conscription for home defence service effective 1 January 1940.

This resulted in conflicts with British commanders, particularly the Commander-in-Chief Middle East, General Sir Claude Auchinleck, most notably over the relief of Tobruk.

[8] A controversial decision of the Menzies government was that senior commands in Blamey's 6th Division would be restricted to Militia officers.

[18] After the war with Japan began, large numbers of experienced AIF officers were posted to Militia units.

The Army was also faced with government requests to release manpower to industry, and later to discharge long-serving personnel.

It took time for the Army to overcome its objections, and modern weapons, such as the 25 pounder, were soon coming off the assembly lines in Australia.

A large number of personnel were aged 20 on enlistment, and many former members of the First AIF joined up, a practice encouraged by some unit commanders, who liked to have some old hands around.

[28] The 6th Division, under Major General Iven Mackay fought in the Western Desert campaign at Bardia, Tobruk and Benghazi.

[36] The 7th Division, under Major General Arthur Allen and other Australian units formed the body of the Allied invasion of Lebanon and Syria in 1941.

[39] The bulk of the 7th Division was deployed in support of Militia battalions engaged in a rearguard action on the Kokoda Track Campaign in New Guinea.

[40] Most of the 8th Division was sent to Malaya to strengthen the garrison prior to war with Japan, while the remaining battalions were deployed in the Dutch East Indies and New Guinea.

[42] The divisional commander, Major General Henry Gordon Bennett created an enduring controversy by escaping.

[43][44] A small, lesser-known force known as Mission 204 was drawn from units in Malaya, including forty men of the 8th Division.

It was filled up with Militia battalions, and it and other remaining elements of the 8th Division participated in the campaigns in the South West Pacific.

[51] AIF Independent companies continued guerrilla operations in East Timor for many months until being evacuated in January 1943.

Independent companies played an important part in the defence of New Guinea, initially occupying several locations to Australia's north to provide an early warning capability in the months prior to the outbreak of the Pacific War, and then, after the fighting had started, fighting several delaying campaigns in Timor, New Guinea, and New Britain.

[52] The 9th Division fought in the North African campaign under Major General Leslie Morshead and distinguished itself first at the Battle of Tobruk, where it became the first Allied unit to resist German Blitzkrieg tactics.

The Axis leader in North Africa, Lieutenant General Erwin Rommel, described the 9th Division at Tobruk as: "immensely big and powerful men, who without question represented an elite formation of the British Empire, a fact that was also evident in battle.

[56] General Douglas MacArthur, Supreme Allied Commander in the South West Pacific Area depended on the AIF as the spearhead of his land forces in 1942 and 1943.

Meanwhile, the 9th Division, now under Major General George Wootten fought at Red Beach and then in the Huon Peninsula campaign.