After the fierce battles at Guadalcanal in the South Pacific Area, the 1st Marine Division underwent rehabilitation in Australia, which lay within General MacArthur's Southwest Pacific Area. Once the division had recovered from the ordeal of the Solomon Islands fighting, it gave MacArthur a trained amphibious unit that he desperately needed to fulfill his ambitions for the capture of Rabaul. Theoretically, the 1st Marine Division was subordinate to General Sir Thomas Blamey, the Australian officer in command of the Allied Land Forces, and Blamey's nominal subordinate, Lieutenant General Walter Kreuger, commanding the Sixth U.S. Army. But in actual practice, MacArthur bypassed Blamey and dealt directly with Kreuger.

When the 1st Marine Division became available to MacArthur, he still intended to seize Rabaul and break the back of Japanese resistance in the region. Always concerned about air cover for his amphibious operations, MacArthur planned to use the Marines to capture the airfields at Cape Gloucester. Aircraft based there would then support the division when, after a brief period of recuperation, it attacked Rabaul. The decision to bypass Rabaul eliminated the landings there, but the Marines would nevertheless seize the Cape Gloucester airfields, which seemed essential for neutralizing the base.

The initial concept of operations, which called for the conquest of western New Britain preliminary to storming Rabaul, split the 1st Marine Division, sending Combat Team A (the 5th Marines, reinforced, less one battalion in reserve) against Gasmata on the southern coast of the island, while Combat Team C (the 7th Marines, reinforced) seized a beachhead near the principal objective, the airfields on Cape Gloucester. The Army's 503d Parachute Infantry would exploit the Cape Gloucester beachhead, while Combat Team B (the reinforced 1st Marines) provided a reserve for the operation.

Revisions came swiftly, and by late October 1943 the plan no longer mentioned capturing Rabaul, tacit acceptance of the modified Allied strategy, and also satisfied an objection raised by General Rupertus. The division commander had protested splitting Combat Team C, and Kreuger agreed to employ all three battalions for the main assault, substituting a battalion from Combat Team B, the 1st Marines, for the landing on the west coast. The airborne landing at Cape Gloucester remained in the plan, however, even though Rupertus had warned that bad weather could delay the drop and jeopardize the Marine battalions already fighting ashore. The altered version earmarked Army troops for the landing on the southern coast, which Kreuger's staff shifted from Gasmata to Arawe, a site closer to Allied airfields and farther from Rabaul with its troops and aircraft. Although Combat Team B would put one battalion ashore southwest of the airfields, the remaining two battalions of the 1st Marines were to follow up the assault on Cape Gloucester by Combat Team C. The division reserve, Combat Team A, might employ elements of the 5th Marines to reinforce the Cape Gloucester landings or conduct operations against the offshore islands west of New Britain.

During a routine briefing on 14 December, just one day before the landings at Arawe, MacArthur off-handedly asked how the Marines felt about the scheme of maneuver at Cape Gloucester. Colonel Edwin A. Pollock, the division's operations officer, seized the opportunity and declared that the Marines objected to the plan because it depended on a rapid advance inland by a single reinforced regiment to prevent heavy losses among the lightly armed paratroops. Better, he believed, to strengthen the amphibious forces than to try for an aerial envelopment that might fail or be delayed by the weather. Although he made no comment at the time, MacArthur may well have heeded what Pollock said; whatever the reason, Kreuger's staff eliminated the airborne portion, directed the two battalions of the 1st Marines still with Combat Team B to land immediately after the assault waves, sustaining the momentum of their attack, and alerted the division reserve to provide further reinforcement.