The 163rd Rifle Division was formed as an infantry division of the Red Army just before the Second World War began, in the Tula Oblast, based on the pre-September 13, 1939 shtat (table of organization and equipment). As a reinforced rifle division, it took part in the Winter War with Finland, where it was encircled at Suomussalmi. Despite a rescue attempt by the 44th Rifle Division from the Raate Road (which was also the route used by some of the 163rd's forces) the division was largely destroyed in one of the best-known Finnish victories of the war.
What little remained of the 163rd was moved postwar to Novgorod in the Leningrad Military District to be rebuilt as a motorized division. At the outbreak of war with Germany it was assigned to 1st Mechanized Corps and was part of the reserves of the redesignated Northern Front. In common with most Soviet motorized divisions it was significantly short of trucks and its outdated tanks were lost, mostly to breakdowns, before the end of August. During that month, as part of 34th Army, it took part in the Northwestern Front's counterstrike at Staraya Russa which briefly surrounded two German divisions and inflicted a considerable delay on Army Group North's advance on Leningrad, although at heavy cost.
