The battalion's personnel concentrated at Seymour, Victoria, after taking leave, and the 2/23rd subsequently began a period of training and re-organisation as it was converted to the jungle division establishment. This resulted in the issue of new equipment, and a decrease in the battalion's authorised strength and number of vehicles. Training was completed on the Atherton Tablelands in Queensland, before the battalion moved to Milne Bay, in New Guinea, in August 1943. The following month, on 4 September, they took part in an amphibious landing to capture Lae, during which one of the landing craft the battalion headquarters was travelling in was bombed by a Japanese aircraft, killing the battalion's commanding officer of the time, Lieutenant Colonel Reg Wall. Major Eric McRae assumed temporary command of the battalion until Lieutenant Colonel Frederick Tucker arrived in October. The 2/23rd subsequently took part in a brief advance along the coast driving on Lae from the east through the jungle, with the battalion crossing several rivers along the way. Several minor skirmishes took place during the advance, although the most significant action was fought on the second day of the operation between an isolated platoon and the remnants of a Japanese company, during which the Japanese force was largely destroyed.