Most historians place the beginning of the Second Sino-Japanese War on July 7, 1937 at the Marco Polo Bridge Incident, when a crucial access point to Beiping was assaulted by the Imperial Japanese Army (IJA). Because the Chinese defenders were the poorly equipped infantry divisions of the former Northwest Army, the Japanese easily captured Beiping and Tianjin.

The Imperial General Headquarters in Tokyo were initially reluctant to escalate the conflict into full scale war, being content with the victories achieved in northern China following the Marco Polo Bridge Incident. However, the KMT central government determined that the "breaking point" of Japanese aggression had been reached and Chiang Kai-shek quickly mobilized the central government army and airforce under his direct command to attack the Japanese Marines in Shanghai on August 13, 1937, which led to the Battle of Shanghai. The IJA had to mobilize over 200,000 troops, coupled with numerous naval vessels and aircraft to capture Shanghai after more than three months of intense fighting, with casualties far exceeding initial expectations.

Building on the hard won victory in Shanghai, the IJA captured the KMT capital city of Nanking and Southern Shanxi by the end of 1937, in campaigns involving approximately 350,000 Japanese soldiers, and considerably more Chinese. Historians estimate up to 300,000 Chinese were mass murdered in the Nanking Massacre (also known as the 'Rape of Nanking'), after the fall of Nanking on December 13, 1937, while some Japanese deny the existence of a massacre.

At the start of 1938, the Headquarters in Tokyo still hoped to limit the scope of the conflict to occupying areas around Shanghai, Nanjing and most of northern China, in order to preserve strength for an anticipated showdown with the Soviet Union. But by now the Japanese government and GHQ had effectively lost control of the Japanese army in China. With many victories achieved, Japanese field generals escalated the war and finally met with defeat at Taierzhuang. Afterwards the IJA had to change its strategy and deploy almost all of its armies in the attack on the city of Wuhan, which by now was the political, economic and military center of China, in hopes of destroying the fighting strength of the National Revolutionary Army (NRA) and forcing the KMT government to negotiate for peace. But after the Japanese capture of the city of Wuhan on October 27, 1938, the KMT was forced to retreat to Chongqing (Chungking) to set up a provisional capital, with Chiang Kai-shek still refusing to negotiate unless Japan agreed to withdraw to her pre-1937 borders.