Originally intended to support the 7th Division the 2/2nd Machine Gun Battalion was raised in Sydney on 2 May 1940 and largely composed of personnel from light horse units in New South Wales and Queensland

In June 1942, the 9th Division received urgent orders to return to Egypt to reinforce the British 8th Army that had retreated to the Alamein “box”. The 2/2nd played an important part during the subsequent battles, fighting alongside the infantry defending the Alamein line in July and during the counter-attack in October to November. By 6 November Axis forces were retreating. The battalion suffered heavily: one officer and 15 other ranks were killed in action; one officer and 14 other ranks were mortally wounded; four officers and 124 other ranks were wounded; and two officers and 26 other ranks were captured.

In August the 2/2nd was sent to Milne Bay in Papua to temporarily help guard the base and provide labour. The following month it landed at Lae to support the 9th Division’s invasion. Upon landing the battalion was hit by Japanese aircraft: one man was killed and another 28 wounded. Following Lae’s capture the battalion’s C Company supported the 20th Brigade landing on Scarlet Beach, north of Finschhafen. Finschhafen was officially captured on 2 October, thereafter the rest of the battalion was brought forward to help defend the area. It fought in New Guinea for the rest of the year supporting the infantry during the capture of Sattelberg and advance to Sio.