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Together they formed the 1st Australian Corps, 2nd AIF. However, events overtook them, and France fell to the Germans in July 1940 before the Australian Corps arrived.

Both brigades were sent to the Middle East in October 1940. The 19th Brigade was designated to join this division on the division's arrival in the Middle East but left it in November 1940, for the 6th Division. The 18th Brigade would later join the division on its arrival in the Middle East from England.

But this division also underwent other changes. The 20th Brigade was transferred in January 1941 to the newly created 9th Australian Infantry Division, which was formed in the Middle East on 18 December 1940. To take its place, the 25th Australian Infantry Brigade was moved from the United Kingdom in March 1941 to complete the 7th Division. The 25th Brigade was created in England in June 1940 from extra troops attached to 18th Brigade. Various corps and army troops began to form after this division was raised.

The 7th Division AIF was formed in late February 1940 with Sir John Lavarack as its Commander. The infantry formations of the Division were as follows:

18th Infantry Brigade:
2/9th Battalion, 2/10th Battalion, 2/12th Battalion
21st Infantry Brigade:
2/14th Battalion, 2/16th Battalion, 2/27th Battalion
25th Infantry Brigade:
2/25th Battalion, 2/31st Battalion, 2/33rd Battalion

see notes above as many changes were made

They called themselves "The Silent Seventh" because although they did more than their fair share of the work other Units often got the lion's share of credit. The 7th were often overlooked by the media of the day.

• Artillery support was provided by the 2/4th, 2/5th and 2/6th Field Regiments.
  Supporting troops were the 2/3rd Machine Gun Battalion, 2/2nd Pioneer Battalion, 7th Division Cavalry Regiment, and Medical units, Engineers and Base Troops.
  
  The 7th Division left Australia in October 1940 for the Middle East. Over the next two months, the 7th was concentrated in Palestine. It was slotted for a move to Greece to help in the defence against Axis invasion, but instead moved into defensive positions in the Western Desert. Parts of the Division under the command of Maj General Allen crossed into Syria and fought a hard won victory in the campaign against the Vichy French . 18th Brigade excelled itself as part of the defence of Tobruk.  

  With Japanese invasion of Australia imminent, the Division was recalled home. Elements of the Division (2/3rd Machine Gun Battalion, 2/2 Pioneer Battalion, 2/2 CCS, 2/6 Fld Pk Coy and 105 Gen Tpt Coy) were diverted to Java. They fought a defensive campaign against overwhelming Japanese odds and were only forced to surrender after an early capitulation by the Dutch forces there.
  
  The Division moved to New Guinea and established headquarters in Port Moresby. The timely arrival of the Division in New Guinea helped to halt the Japanese advance.. 21st Brigade fought a bitter campaign of attrition on the Kokoda Track, until replaced by 25th Brigade who slowly forced the Japanese northwards. 18th Brigade and other Australian units inflicted the first decisive defeat of the Japanese on land in World War 11 at Milne Bay and then at Buna and Sanananda in January 1943.  

  21st Brigade and the militia 39th Battalion won a costly victory at Gona in December 1942. George Vasey took over command of the Division in October 1942, until his death in a plane crash in 1945. Major General Milford then took over command until the end of the war. In 1943, the Division was airlifted from Port Moresby to Nadzab in the Markham Valley. After an advance on Lae, the Markham and Ramu Valleys were soon swept clear of Japanese troops. A bloody campaign in the mountains of the Finisterre Ranges followed. 2/9th were at Shaggy Ridge in 1944. They took over from the 2/16 in January.
  
  The 7th Division returned to Australia in triumph. The troops trained in the Atherton Tablelands in Queensland, preparing for the push to clear the Japanese from the Pacific Islands. In July 1945, the 7th Division invaded Balikpapan in Borneo against stiff opposition. The Japanese were relentlessly pushed back, until 15 August 1945 when it was announced that the war with Japan had been won. The 7th Division's war was over.
  
  A total of five Victoria Crosses were awarded to the 7th Division. The brave recipients were 

  • Lt Roden Cutler, 

  • Pte Jim Gordon,

  • Cpl John French (killed in action), 

  • Pte Bruce Kingsbury (killed in action) and

  • Pte Richard Kelliher. (Kelliher was convicted of cowardice in the face of the enemy, the conviction was later overturned and he went on to win the VC.)