Throughout the 1930s tensions built between Germany and the United Kingdom as well as its allies. During late 1937, and throughout 1938, German demands for the annexation of Czechoslovakia's Sudetenland led to an international crisis. In an attempt to avoid war, British Prime Minister Neville Chamberlain met with German Chancellor Adolf Hitler in September and brokered the Munich Agreement. The agreement averted war and allowed Germany to annex the Sudetenland. While it had been intended as an agreement to reconcile differences, and for future issues to be resolved peacefully, relations between both countries soon deteriorated. On 15 March 1939, Germany breached the terms of the agreement by invading and occupying the remnants of the Czech state.
In response, on 29 March, the British Secretary of State for War Leslie Hore-Belisha announced plans to increase the Territorial Army from 130,000 men to 340,000 and in so doing double the number of territorial divisions. The intended plan of action was for the existing units to recruit over their allowed establishments (aided by an increase in pay for territorials, the removal of restrictions on promotion that had been a major hindrance to recruiting during the preceding years, the construction of better quality barracks, and an increase in supper-time rations) and then form 'Second Line' divisions from small cadres that could be built upon. As a result,the 61st Infantry Division was to be created as a Second Line unit, a duplicate of the First Line 48th (South Midland) Infantry Division. In April, limited conscription was introduced. At that time 34,500 'Militiamen', all of the age of 20, were conscripted into the regular army with the intent of being trained for six months before being deployed to the forming second line units. However, despite the intention for the army to grow in size, the programme was complicated by a lack of central guidance on the expansion and duplication process, and issues regarding the lack of facilities, equipment, and instructors.
Despite the ongoing efforts and some regiments being able to recruit the required numbers to form new battalions, the whole process had – in the words of historian James P. Levy – "not progressed beyond the paper stage when [the Second World War] began in September." By the outbreak of the war, the division was active, under the command of Major-General Robert J. Collins, and was composed of the 182nd, 183rd, and 184th Infantry Brigades and supporting elements. Following the division's formation, it was assigned to Southern Command. At the end of November, Major-General Adrian Carton de Wiart took command. The division was spread out, ranging from Birmingham to Portsmouth, and Cheltenham to Reading, and with the headquarters based in Oxford. On 15 April, Carton de Wiart, as well as the divisional staff, were deployed to Norway, and Major-General Edmond Schreiber was given command of the division.
In their opening assault upon Norway, German troops had seized Trondheim. In response, the British Army planned to launch a two pronged pincer attack to retake the city. The troops to undertake this attack came from the 49th (West Riding) Infantry Division (a first line territorial division), which had already been earmarked for service in Norway prior to the German invasion. The division was temporarily broken up, with its brigades acting as individual commands. The 146th Infantry Brigade, which would make up the bulk of Mauriceforce and form the northern pincer began landing on 17 April. Due to time restraints and troops already assigned to the expedition, the division was not deployed to Norway. Instead, Carton de Wiart was given command of Mauriceforce and was allowed to select his staff which he drew from his headquarters. The southern pincer, 200 miles (320 km) to the south and separated by mountainous terrain and rivers, was to be undertaken by Major-General Bernard Paget's Sickleforce that had landed at Åndalsnes.
Soon after arriving, the 146th's leading battalions began to move south. On 21 April, Carton De Wiart's troops engaged in the first encounter of the war between British and German troops. The British troops, largely confined to the road network and advancing in deep snow, were engaged by a slightly larger German force that was supported by artillery and air support. The Germans, utilizing sledges, motorcycles, and ski-troops were able to outmanoeuvre and force back the British. German follow-up attacks did not materialize, however the Luftwaffe heavily bombed the small port at Namsos. Carton De Wiart cabled the War Office and stated "with my lack of equipment I was quite incapable of advancing on Trondheim and could see very little point in remaining in that part of Norway sitting out like rabbits in the snow." The evacuation was not ordered until the end of the month and then completed in the early days of May, following the loss of 157 men of Mauriceforce. The lack of success in Norway, and the withdrawal of the forces attempting to retake Trondheim resulted in the collapse of Chamberlain's Government. Carton De Wiart, considered a daring and aggressive commander, was – per historian Jack Adams – "hampered by ... climatic and geographic conditions" in addition to his troops being "inexperienced, poorly prepared and badly backed up".
As early as the middle of May, while the Battle of France was still being waged, the British Government began to fear that Germany would immediately launch an invasion of the British Isles. This fear was compounded by, as historian Paul McMahon commented, the "catastrophic Allied defeats" that soon followed, which produced "two hysterias in the summer of 1940: first, fear of imminent invasion and, second, a 'fifth column panic'." The initial fear of invasion was aroused by the alleged capture of German documents, by the Dutch, which contained plans for a German invasion and also included information regarding a simultaneous attack on Ireland by paratroopers who were to be assisted by the Irish Republican Army (IRA). This document, which no longer exists, caused panic within the British Government. This information was reinforced, in the following months, by reports warning of a German intent to invade Ireland from diplomatic missions and the Secret Intelligence Service (SIS). On 14 May, following his return to the United Kingdom, Carton De Wiart resumed command of the 61st Infantry Division. After the British Expeditionary Force was evacuated from France, the British acted on the rumours of the German intent to invade Ireland, and the decision was made to reinforce the garrison (the 53rd (Welsh) Infantry Division) by deploying the 61st Infantry Division (Over the following 12 months, the division would be followed by the 5th and 48th (South Midland) Divisions and the 71st and 72nd Independent Infantry Brigades).
McMahon commented that the SIS had a history of "furnish[ing] unreliable information on the IRA's foreign intrigues." Yet, these past failures were ignored as the reports reinforced the fears of invasion. MaMahon suggested that "It is even possible that the plans discovered in Holland were planted. Whether deliberate deception or not, British intelligence was well and truly deceived." Historian Eunan O'Halpin argued that while the Dutch document could be seen as a British fabrication, "it is now known ... that German deception operations prepared in anticipation of Operation 'Sealion' included the manufacturing of rumours and stories of plans to attack Ireland as a feint during the build up to an invasion of Southern England." Nicholas Mansergh commented that "Ireland had no place" in the initial Sealion plans, and it was not until 3 December 1940 that German planners even looked at the possibility before concluding that such an operation was not possible or if launched would result in failure. In his memoirs, Carton De Wiart commented "I can never believe the Germans had any intention of invading Ireland but I am very grateful for any reason which sent us there, for it was an ideal training ground for troops and the division improved enormously from the moment of our arrival."
The 61st moved to Northern Ireland, and came under the command of Northern Ireland District on 20 June. The division was responsible for manning the static defences across Northern Ireland and defending Belfast, as well as being responsible for the internal security of the country. While based across most of Northern Ireland, it was largely positioned within County Antrim, County Londonderry, and County Tyrone, with the divisional headquarters at Ballymena. The division trained to repel seaborne invasions from German forces, in addition to airborne landings and small raids. The beaches of County Antrim and Londonderry were seen as the most likely areas for an invasion, and by the end of autumn, concrete pillars, barbed wire entanglements, and camouflaged firing positions had been constructed. During the division's stay in Northern Ireland, Lieutenant-General Henry Pownall took command of British forces in the country. His appointment resulted in Carton De Wiart losing command of the division on grounds of his age (one month shy of his 61st birthday). Carton De Wiart was replaced by Major-General Charles Fullbrook-Leggatt, who assumed command on 6 April 1941, and was in turn followed by Major-General John Owen Carpenter on 15 September 1942.
The division returned to the England on 4 February 1943, and was placed under the command of XI Corps and based in Essex. Between 4–12 March, the division participated in Exercise Spartan; the largest military exercise ever held in the United Kingdom. David French commented that the exercise "was designed to analyse the problems that would arise after a force had landed on a hostile shore and was advancing from a bridgehead." The exercise revealed weaknesses in elements of the senior leadership, in particular the officers in overall command of the armies deployed for the exercise, and highlighted the improvements made in general by the infantry. In May, the division was transferred to II Corps and moved to Kent following-which Major-General Charles Wainwright took command. The division was earmarked for a role in Operation Overlord and Marcus Cunliffe wrote that Exercise Spartan "seemed to be every indication that" the division was to be a front-line unit. In September, the division in conjunction with the 1st Polish Armoured Division was placed under the control of II Canadian Corps for Exercise Link. In the months following the exercise, the division was relegated to 'Lower Establishment' status. This meant that the division was now to be strictly used for home defence in a static role compared to 'Higher Establishment' divisions that were intended for deployment overseas and combat. As part of this change in priorities, the division also became a training formation and one intended to find suitable replacements for fighting formations. By October, the division had also been assigned to anti-invasion duties in Kent. While based there, German cross-Channel guns periodically shelled the area, and in 1944 V-1 flying bombs became a minor issue. In December 1943, the division (reinforced, for the exercise, by the 31st Tank Brigade) played the defending force in Exercise Vulcan; a four-day training exercise aimed at improving the attacking process of the 43rd (Wessex) Infantry Division.
During 1944, the division aided Operation Overlord in a number of formats. On 9 April, the 183rd Infantry Brigade ceased to exist as an formation and formed HQ Residue Concentration Area to aid the invasion preparation. The 4th Battalion, Northamptonshire Regiment and the 10th Battalion, Worcestershire Regiment were attached to 21st Army Group to aid 185th Camouflage Field Company, Royal Engineers. The men of the 4th Northamptonshire Regiment created 150 fake Landing Craft Tanks (LCTs), made from steel tubing and canvas, and positioned them along the River Deben at Ipswich, as well as at Oulton Broad, Lowestoft and Great Yarmouth. The 10th Worcestershire Regiment constructed fake landing craft at Dover, Folkestone, and Harwich, in addition to fake LCTs on the River Orwell. By 6 June, the battalion had constructed 122 such dummy displays. In May, as part of Operation Fortitude, Juan Pujol García (the British double agent known as Garbo) reported to the Germans that the division was ostensibly based around Brighton and Newhaven. Here, in addition to 45th Infantry Division and Royal Marines, it allegedly took part in the build-up of the notional First United States Army Group (FUSAG). The division was then made part of the fictional British VII Corps, part of the equally fake Fourth Army, and 'travelled' to Scotland before returning south to FUSAG. Furthermore, signallers from the division maintained wireless traffic to give the Germans the impression that VII Corps also included the notional 80th Division.
By mid-1944, the five 'Lower Establishment' divisions allocated to home defence duties (the 38th (Welsh), the 45th, the 47th (London), the 55th (West Lancashire), and the 61st) had a combined total of 17,845 men. Of this number, around 13,000 were available as replacements for the 21st Army Group fighting in France. The remaining 4,800 men were considered ineligible at that time for service abroad for a variety of reasons, including a lack of training or being medically unfit. Over the following six months, up to 75 per cent of these men would be deployed to reinforce 21st Army Group following the completion of their training and certification of fitness. For example, those eligible for overseas service from the 9th Battalion, Worcestershire Regiment were transferred to 21st Army Group. The battalion was then tasked with training those who were considered unfit, re-training soldiers who had recovered from wounds, and training men from anti-aircraft units to become infantry. On 18 July, HQ Residue Concentration Area reverted to its former infantry role. Two days later, the brigade staff of 184th Infantry Brigade became the headquarters of 183rd Infantry Brigade and likewise the headquarters staff of the 183rd became HQ 184th Infantry Brigade. In August, the 4th Northamptonshire was transferred to Force 135 that was planning to end the German occupation of the Channel Islands. Such an attack did not materialize, and the entire force was transferred to Europe to reinforce 21st Army Group. On 1 September, the 184th Infantry Brigade (while remaining part of the division) was transferred to the Orkney and Shetland Islands for a two-month stint as the defensive garrison. Over the remainder of the year, and into 1945 the makeup of the division changed. However, the role of the division remained the same. For example, the 4th Battalion, Devonshire Regiment role was find drafts for other battalions fighting overseas.
In August 1945, following the conclusion of the war in Europe, the division was reorganized as a light division. The light division concept had been undertaken during the Burma Campaign following the initial defeats. Historian F.W. Perry commented that the British Indian Army concluded that "existing Indian formations were over-mechanised and road-bound." Therefore, the surviving 17th Indian Division was reorganised as a light division. This included being reduced to two infantry brigades, all non-cross country capable vehicles being replaced with mules, jeeps, and four-wheel drive trucks, and the field artillery either completely replaced by pack howitzers or mechanised. These changes greatly increased the off-road mobility, and the increase in pack animals allowed it to operate away from a road network for an extended period of time.
The 61st retained its three infantry brigades, although there were changes to the divisional troops along the above lines. It was intended that the division would be able to be transferred by air to any theatre of war, and its personnel trained to fight in any terrain encountered. Once on the ground, the entire division would be mobile utilizing only jeeps. To help adapt to this new role, training exercises were carried out. The initial destination for the division was the Far East to support the fight against Imperial Japan. However, the Japanese surrender resulted in the move being cancelled, and the division never left the United Kingdom. In November, the division was disbanded.