The battalion was formed on 29 December 1941 at Papakura, under the command of Lieutenant Colonel John Barry, in response to Japan's entry into the war following the bombing of Pearl Harbor and the invasion of Malaya. With the possibility of a Japanese advance south through the Pacific, the New Zealand government decided to raise a force of three infantry battalions to bolster the garrison in Fiji. The 36th Battalion was one of these units; the others being the 35th and 37th Battalions. Upon formation, the majority of the battalion's other ranks were drawn from men from the Central Districts who were originally intended to be sent to the Middle East as reinforcements for the New Zealand 2nd Division, while officers were mainly sourced from armoured formations such as the Tank Brigade and the Divisional Cavalry Regiment. Upon establishment, the battalion consisted of a headquarters company, three rifle companies and a machine-gun/support company.