On 22 June 1941, Germany, along with other European Axis members and Finland, invaded the Soviet Union in Operation Barbarossa. The primary targets of this surprise offensive were the Baltic region, Moscow, and Ukraine, with an ultimate goal of ending the 1941 campaign near the Arkhangelsk-Astrakhan line, connecting the Caspian and White Seas. Hitler's objectives were to eliminate the Soviet Union as a military power, exterminate Communism, generate Lebensraum ("living space") by dispossessing the native population and guarantee access to the strategic resources needed to defeat Germany's remaining rivals.

Although the Red Army was preparing for strategic counter-offensives before the war, Barbarossa forced the Soviet supreme command to adopt a strategic defence. During the summer, the Axis made significant gains into Soviet territory, inflicting immense losses in both personnel and materiel. By the middle of August, however, the German Army High Command decided to suspend the offensive of a considerably depleted Army Group Centre, and to divert the Second Panzer Group to reinforce troops advancing toward central Ukraine and Leningrad. The Kiev offensive was overwhelmingly successful, resulting in encirclement and elimination of four Soviet armies, and made further advance into Crimea and industrially developed Eastern Ukraine (the First Battle of Kharkov) possible.

The diversion of three quarters of the Axis troops and the majority of their air forces from France and the central Mediterranean to the Eastern Front^[100][101] prompted Britain to reconsider its grand strategy. In July, the UK and the Soviet Union formed a military alliance against Germany and jointly invaded Iran shortly afterwards to secure the Persian Corridor and Iran's oilfields. In August, the United Kingdom and the United States jointly issued the Atlantic Charter.

By October, when Axis operational objectives in Ukraine and the Baltic region were achieved, with only the sieges of Leningrad and Sevastopol continuing, a major offensive against Moscow had been renewed. After two months of fierce battles, the German army almost reached the outer suburbs of Moscow, where the exhausted troops were forced to suspend their offensive. Large territorial gains were made by Axis forces, but their campaign had failed to achieve its main objectives: two key cities remained in Soviet hands, the Soviet capability to resist was not broken, and the Soviet Union retained a considerable part of its military potential. The blitzkrieg phase of the war in Europe had ended.

By early December, freshly mobilised reserves allowed the Soviets to achieve numerical parity with Axis troops. This, as well as intelligence data that established a minimal number of Soviet troops in the East sufficient to prevent any attack by the Japanese Kwantung Army, allowed the Soviets to begin a massive counter-offensive that started on 5 December along a 1,000 kilometres (620 mi) front and pushed German troops 100–250 kilometres (62–160 mi) west.

German successes in Europe encouraged Japan to increase pressure on European governments in south-east Asia. The Dutch government agreed to provide Japan oil supplies from the Dutch East Indies, while refusing to hand over political control of the colonies. Vichy France, by contrast, agreed to a Japanese occupation of French Indochina. The United States, United Kingdom, and other Western governments reacted to the seizure of Indochina with a freeze on Japanese assets, while the United States (which supplied 80 percent of Japan's oil) responded by placing a complete oil embargo. That meant Japan was essentially forced to choose between abandoning its ambitions in Asia and the prosecution of the war against China, or seizing the natural resources it needed by force; the Japanese military did not consider the former an option, and many officers considered the oil embargo an unspoken declaration of war.

Japan planned to rapidly seize European colonies in Asia to create a large defensive perimeter stretching into the Central Pacific; the Japanese would then be free to exploit the resources of Southeast Asia while exhausting the over-stretched Allies by fighting a defensive war. To prevent American intervention while securing the perimeter it was further planned to neutralise the United States Pacific Fleet from the outset. On 7 December (8 December in Asian time zones), 1941, Japan attacked British and American holdings with near-simultaneous offensives against Southeast Asia and the Central Pacific. These included an attack on the American fleet at Pearl Harbor, landings in Thailand and Malaya and the battle of Hong Kong.

These attacks led the U.S., Britain, Australia, and other Allies to formally declare war on Japan. Germany and the other members of the Tripartite Pact responded by declaring war on the United States. In January, the United States, Britain, Soviet Union, China, and 22 smaller or exiled governments issued the Declaration by United Nations, which affirmed the Atlantic Charter. The Soviet Union did not adhere to the declaration; it maintained a neutrality agreement with Japan, and exempted itself from the principle of self-determination.

Meanwhile, by the end of April 1942, Japan had almost fully conquered Burma, Malaya, the Dutch East Indies, Singapore, and Rabaul, inflicting severe losses on Allied troops and taking a large number of prisoners. Despite a stubborn resistance in Corregidor, the Philippines was eventually captured in May 1942, forcing the government of the Philippine Commonwealth into exile. Japanese forces also achieved naval victories in the South China Sea, Java Sea and Indian Ocean, and bombed the Allied naval base at Darwin, Australia. The only real Allied success against Japan was a Chinese victory at Changsha in early January 1942. These easy victories over unprepared opponents left Japan overconfident, as well as overextended.

Germany retained the initiative as well. Exploiting dubious American naval command decisions, the German navy ravaged Allied shipping off the American Atlantic coast. Despite considerable losses, European Axis members stopped a major Soviet offensive in Central and Southern Russia, keeping most territorial gains they achieved during the previous year. In North Africa, the Germans launched an offensive in January, pushing the British back to positions at the Gazala Line by early February, followed by a temporary lull in combat which Germany used to prepare for their upcoming offensives.