In August and September 1942, the 25th Battalion took part in the pivotal Battle of Milne Bay, remaining there after repelling the Japanese invasion. They spent the next six months deployed there, before moving back to Port Moresby in March 1943. They returned to Australia in November 1943, reforming on the Atherton Tablelands in early 1944. A period of training followed before the 25th deployed to Madang in New Guinea for further garrison duties. In November, as part of the 3rd Division, the battalion was committed to the Bougainville Campaign where the Australians had taken over from the American forces that had previously been fighting a containment campaign. The 25th Battalion subsequently took part in a number of significant actions as the Australians went on the offensive. These actions included the Battle of Pearl Ridge in December 1944 in the central sector of the island and then the Battle of Slater's Knoll in April after the 7th Brigade was reassigned to the drive south towards the Japanese stronghold in Buin. For his actions during the fighting around Slater's Knoll, one 25th Battalion member, Corporal Reginald Rattey, received the Victoria Cross. After the fighting around Slater's Knoll, the 25th Battalion played no further part in the fighting before the war came to in August as the 7th Brigade was relieved by the 15th.