The district was formed in response to the Japanese invasion of China and military escalation in the region. The armies and corps of the district took part in the battle of Khalkhin Gol under General Georgy Zhukov. In June 1940 the 16th Army was formed in the District before being transferred to the west. The Transbaikal Military District became home to the Transbaikal Front; a front formed on September 15, 1941 in order to prevent a possible attack by the Japanese Kwantung Army. Against the general trend of Soviet tank divisions being disbanded in the first few months of the German invasion during World War II, due to heavy losses, the 57th and 61st Tank Divisions were active in the District in 1941 and remained active there for most of the war.
In October 1945 the Transbaikal Front was disbanded and its military units were reorganized, following the success of Operation August Storm.
In the late 1960s the situation on the Sino-Soviet border was dangerous and many new units were sent to Siberia, or formed there, such as the 29th Army. Thanks to this buildup, Chita became one of the developed cities in Eastern Siberia. In 1988 the District included the 29th Army at Ulan-Ude (5th Guards Tank Division, 52nd, 91st and 245th Motor Rifle Divisions), the 36th Army at Borzya (11th Guards, 38th Guards, and 122nd Guards Motor Rifle Divisions), and the 39th Army, controlling Soviet troops in Mongolia, which had its heaquarters at Ulan-Bator and included the 2nd Guards Tank Division, 51st Tank Division, and 12th, 41st, and 149th Motor Rifle Divisions. The Soviet troops in Mongolia were finally withdrawn between 1989 and 1992.