On 2 February 1916, after the AIF had withdrawn from Gallipoli and was being reorganised in Egypt, the Australian Government agreed to form a third Division. Assembly began in March 1916 and the Division began to arrive in England in July 1916. After intensive training it crossed to France in December 1916 and thereafter fought in many of the major actions of the war. The Division was initially under the command of then Major General John Monash, who went on to command the Australian Corps and who is generally regarded as amongst the finest military commanders of the war. He was succeeded on 31 May 1918 by Major General John Gellibrand:

1917
The Battle of Messines
The Battle of Polygon Wood**
The Battle of Broodseinde**
The First Battle of Passchendaele**
The battles marked ** are phases of the Third Battle of Ypres

1918
The Australian Divisions were not affected by the restructuring of the army to having three brigades per Division, that took place in the British Divisions in February 1918.
The Battle of the Avre (a phase of the First Battles of the Somme 1918)
The Capture of Hamel
The Battle of Albert+
The Second Battle of Bapaume in which the Division captured Mont St Quentin+
The battles marked + are phases of the Second Battles of the Somme 1918
The Battle of the St Quentin Canal (a phase of the Battles of the Hindenburg Line)

The Division was not selected to advance into Germany. Demobilisation commenced in late 1918 and by May 1919 the last troops of the Division had departed for home. .

The order of battle of the 3rd Australian Division

9th Australian Brigade
33rd Bn, the Australian Infantry
34th Bn, the Australian Infantry
35th Bn, the Australian Infantry
36th Bn, the Australian Infantry
9th Australian Machine Gun Company	left to move into 3rd Australian MG Battalion February 1918
9th Australian Trench Mortar Battery	formed August 1916
10th Australian Brigade
37th Bn, the Australian Infantry
38th Bn, the Australian Infantry
39th Bn, the Australian Infantry
40th Bn, the Australian Infantry
10th Australian Machine Gun Company	left to move into 3rd Australian MG Battalion February 1918
10th Australian Trench Mortar Battery	formed August 1916
11th Australian Brigade
41st Bn, the Australian Infantry
42nd Bn, the Australian Infantry
43rd Bn, the Australian Infantry
44th Bn, the Australian Infantry
11th Australian Machine Gun Company	left to move into 3rd Australian MG Battalion February 1918
11th Australian Trench Mortar Battery	formed August 1916
Divisional Troops	under direct command of Divisional HQ
3rd Australian Pioneer Bn	formed in Egypt in March 1916
207th Machine Gun Company	a British unit. Joined October 1916, left October 1917
23rd Australian Machine Gun Company	joined February 1917 left to move into 3rd Australian MG Battalion February 1918
3rd Australian Machine Gun Battalion	formed February 1918
3rd Australian Divisional Train ASC	later titled 867, 868, 869 and 870 Companies
3rd Australian Mobile Veterinary Section AVC	formed in Egypt in August 1915
3rd Australian Divisional Employment Company	joined January 1917
Divisional Mounted Troops	under direct command of Divisional HQ
3rd Australian Cyclist Company	left July 1916
Divisional Artillery
7th Australian Brigade, RFA
8th Australian Brigade, RFA
9th Australian Brigade, RFA	broken up in January 1917
23rd Australian (Howitzer) Brigade, RFA	absorbed in January 1917
3rd Australian Divisional Ammunition Column
V.3.A Heavy Trench Mortar Battery RFA	formed August 1916, left February 1918
X.3.A, Y.3.A and Z.3.A Medium Mortar Batteries RFA	formed August 1916; in February 1918, Z broken up and batteries reorganised to have 6 x 6-inch weapons each
Royal Engineers
9th Australian Field Company
10th Australian Field Company
11th Australian Field Company
3rd Australian Divisional Signals Company
Royal Army Medical Corps
9th Australian Field Ambulance
10th Australian Field Ambulance
11th Australian Field Ambulance