Converted to the jungle divisional establishment on their return to Australia, the battalions of the 9th Division were reorganised to prepare them for the rigours of jungle warfare. This saw their establishment drop to around 800 men, and the loss of much of their vehicular and heavy equipment. Following training on the Atherton Tablelands in Queensland, the battalion was deployed to New Guinea where it took part in the Salamaua–Lae and Huon Peninsula campaigns in 1943–44. During this time, after concentrating at Milne Bay in August 1943, the 2/17th was involved in the first amphibious landing conducted by Australian soldiers since the landing at Anzac Cove of 25 April 1915, when it took part in the landing at Lae as part of Operation Postern on 4 September 1943. Lae fell more quickly than the Allied planners expected, and as a result, a quick follow-up operation was planned to secure the Huon Peninsula. On 22 September, the battalion landed at Scarlet Beach and, tasked with securing the beachhead and the flank, proceeded to move inland towards Sattelberg as part of efforts to capture Finschhafen. Finding their way blocked, the battalion later took part in significant actions around Jivevaneng and Kumawa, and then, after Sattelberg finally fell, the drive towards Sio. The battalion's casualties during this time amounted to 53 killed in action, 10 died of wounds, five died from accident, and 160 wounded in action.