As of July 7, when German Army Group A began its part of Operation Blue, the division was in 46th Army in Transcaucasus Front, where it remained as late as August 1. Over the next two weeks, as the German advance continued into the Caucasus region the division was transferred to the 37th Army and the Front organized a viable defense as reported on August 13:The Army had pulled back to the Baksan River before the German XXXX Panzer Corps began its drive on Mozdok on August 16. The Army continued to hold this line into early September, now with the 2nd Guards Rifle, 275th, 295th and 392nd Rifle and the 11th NKVD Rifle Divisions. The 37th's mission at this time was to prevent the III Panzer Corps' 23rd Panzer and Romanian 2nd Mountain Divisions from advancing south towards Nalchik.