On 10 April 1941, four days after the Axis invasion of Yugoslavia, the Croatian Ustasha Party leader (Poglavnik), Ante Pavelić, left political exile in Italy and declared the 'Independent State of Croatia' in Zagreb. His policies were virulently Catholic, nationalistic and anti-Serb, even though the immediate annexation of Bosnia and Herzegovina yielded Croatia large Moslem and Orthodox Serb minorities.
The Croatian Army (Hrvatsko Domobranstvo) had an I Corps (Zagreb), II Corps (Brod) and III Corps (Sarajevo), with infantry divisions numbered 1 to 5, each with three three-battalion regiments (1 to 15). There were also four engineer battalions, twelve artillery 'battalions' (each with only four 105mm howitzers), a cavalry regiment, logistical services and some armoured cars, a total of 55,000 men. Italian interference and a chronic shortage of professional officers and COs greatly prejudiced its combat value. However, the fanatical Ustasha Militia, organised in five-later 15-700-man battalions, two railway security battalions, and the elite Black Legion and Poglavnik Bodyguard Bn. (later Bde.), fought with a merciless tenacity which impressed and appalled friend and foe alike. An air force was formed, but the Italians vetoed a seagoing navy. Four Gendarmerie regiments (6,000 men) controlled 7,500 civilian militiamen, whilst the German-speaking minority maintained one railway security and three Jager (rifle) battalions in the Army, and an independent four-battalion 'Einsatzstaffel' dressed in quasi-SS uniform. The Wehrmacht recruited the 369th Legion Infantry Regt. (lost at Stalingrad), and Naval and Air Force Legions, while the Italians sent a 1,200-man 'Croat Legion' to Russia, and organised a 20,000-strong paramilitary 'Voluntary Anti-Communist Militia' (MVAC) to fight partisans.
In May 1941 the Croatian Army was engaged in Eastern Bosnia and Herzegovina, against Serbs driven to desperation by Ustasha terror. In January 1942 it forced the Partisans in Eastern Bosnia back into Montenegro, but could not prevent their subsequent advance into Western Bosnia. Clearly conventional infantry divisions were too cumbersome, and so in September 1942 four specially designed mountain brigades (1st to 4th) were formed; each had two regiments totalling four 1,000-man battalions, mounted and MG companies, a two-gun artillery group, 16 light and 16 heavy machine guns, and six mortars. Two volunteer regiments, a mobile Gendarmerie Bde. and an Ustasha Defensive Bde. were also established; but by November 1942 the Partisans had occupied Northern Bosnia, and the Croats could only hold main towns and communications routes, abandoning the countryside.
During 1943 four Jager Bdes. (5th to 8th) were set up, each with four 500-man battalions in two regiments and an artillery group, equipped for hilly terrain, while the Ustasha battalions were re organised into eight four-battalion brigades (1st to 8th). The SS established a multi-national 'German-Croatian Gendarmerie' with 15,000 men in 30 battalions, and later a Gendarmerie Div. to guard railways. The German Army sent home three Croatian Legion Divisions-369th, 373rd (Tiger') and 390nd ('Blue'), while the Waffen-SS formed the 7th 'Prinz Eugen' Mountain Div. (absorbing the Einsatzstaffel), and two ill-fated Bosnian Moslem Divisions-'Handschar' and 'Kama'. After the Italian Armistice the Croatian Navy was expanded, but the loss of even an unreliable ally further weakened the Croatian state.
By 1944 Pavelić was almost totally reliant on his Ustasha units, now 100,000 strong, formed in Brigades 1 to 20, Recruit Training Brigades 21 to 24, three divisions, two railway brigades, one defensive brigade and the new Mobile Brigade. There were also the 33,000 men of the Legion Divisions; and the Croatian Army had 90,000 men, though only 20,000 were combat troops, organised in three mountain, four Jager and eight static garrison brigades, and the 1st Recruit Training Division. In December 1944 the Army was put under Ustasha control, and Army and Ustasha brigades were combined in 17 divisions as follows (correct as in April 1945):
1st Poglavnik Bodyguard Corps: 1st Ustasha Assault, 2nd Ustasha, 5th Ustasha Divs.
2nd Ustasha Corps: 1st, 17th (combining 10th and 14th), 18th Ustasha Assault Divs.
3rd Ustasha Corps: 3rd, 7th, 8th, 9th Divs.
4th Ustashla Corps: 4th, 6th, 15th Divs.
5th Ustasha Corps: 10th, 11th, 13th Divs.
16th Div. (formerly 1st Garrison Div.)