The Battle of Milne Bay (25 August – 7 September 1942), also known as Operation RE or the Battle of Rabi (ラビの戦い) by the Japanese, was a battle of the Pacific campaign of World War II. Japanese naval infantry, known as Kaigun Tokubetsu Rikusentai (Special Naval Landing Forces), with two small tanks attacked the Allied airfields at Milne Bay that had been established on the eastern tip of New Guinea. Due to poor intelligence work, the Japanese miscalculated the size of the predominantly Australian garrison and, believing that the airfields were defended by only two or three companies, initially landed a force roughly equivalent in size to one battalion on 25 August 1942. The Allies, forewarned by intelligence from Ultra, had heavily reinforced the garrison.

Despite suffering a significant setback at the outset, when part of their small invasion force had its landing craft destroyed by Royal Australian Air Force aircraft as they attempted to land on the coast behind the Australian defenders, the Japanese quickly pushed inland and began their advance towards the airfields. Heavy fighting followed as they encountered the Australian Militia troops that formed the first line of defence. These troops were steadily pushed back, but the Australians brought forward veteran Second Australian Imperial Force units that the Japanese had not expected. Allied air superiority helped tip the balance, providing close support to troops in combat and targeting Japanese logistics. Finding themselves heavily outnumbered, lacking supplies and suffering heavy casualties, the Japanese withdrew their forces, with fighting coming to an end on 7 September 1942.

The battle is often described as the first major battle of the war in the Pacific in which Allied troops decisively defeated Japanese land forces. Although Japanese land forces had experienced local setbacks elsewhere in the Pacific earlier in the war, unlike at Milne Bay, these earlier actions had not forced them to withdraw completely and abandon their strategic objective. Nor did they have such a profound impact upon the thoughts and perceptions of the Allies towards the Japanese, and their prospects for victory. Milne Bay showed the limits of Japanese capability to expand using relatively small forces in the face of increasingly larger Allied troop concentrations and command of the air. As a result of the battle, Allied morale was boosted and Milne Bay was developed into a major Allied base, which was used to mount subsequent operations in the region.

Milne Bay is a sheltered 250-square-kilometre (97 sq mi) bay at the eastern tip of the Territory of Papua (now part of Papua New Guinea). It is 35 kilometres (22 mi) long and 16 kilometres (10 mi) wide, and is deep enough for large ships to enter. The coastal area is flat with good aerial approaches, and therefore suitable for airstrips, although it is intercut by many tributaries of rivers and mangrove swamps. Owing to the swampy lands and high rainfall, about 5,100 millimetres (200 in) per year, the area is prone to malaria and flooding. After floods, the coastal plains become "virtually impassable quagmires of glutinous mud", and the ground is not suited for development. The bay is bounded to its north and south by the Stirling Ranges, which at points rise 900–1,500 metres (3,000–5,000 ft) and are covered in Kunai grass and dense scrubland.

The main area of firm ground suitable for construction and development is found directly at the head of the bay. In 1942 this area was occupied by plantations of palm oil, coconuts and cocoa, as well as a number of jetties and villages, connected by what was described by Major Sydney Elliott-Smith of the Australian New Guinea Administrative Unit (ANGAU) as a "modest 'road' system" that was, in actuality, only a dirt track 10–12 metres (33–39 ft) wide. The area was sparsely populated, although there were a number of villages along the track. Ahioma was situated the farthest east, and together with Gili Gili in the west, it bounded Lilihoa, Waga Waga, Goroni, KB Mission, Rabi and Kilarbo.

The Japanese thrust into the Pacific region had begun in early December 1941 with attacks against British and Commonwealth forces in the Battle of Hong Kong and the Malayan campaign, and against the US Pacific Fleet, much of which was caught at anchor in Pearl Harbor. They rapidly advanced south, overwhelming resistance in Malaya, capturing Singapore in February 1942, and successfully occupying Timor, Rabaul and the Dutch East Indies. While a Japanese naval operation aimed at capturing Port Moresby was defeated in the Battle of the Coral Sea in May, elsewhere American forces in the Philippines capitulated, and Japanese forces advanced towards India through Burma.

Although the Japanese had been defeated in the Coral Sea, another attempt at capturing Port Moresby was anticipated. The Allied Supreme Commander of the South West Pacific Area, General Douglas MacArthur, decided to establish airbases to protect Port Moresby. To the west, he authorised the construction of an airbase at Merauke in Netherlands New Guinea. Another, codenamed "Boston", was authorised to the east in the largely unexplored Abau–Mullins Harbour area on 20 May. Any Japanese force approaching Port Moresby by sea would have to sail past these bases, allowing them to be detected and attacked earlier; but the base in the east had other advantages too. Bombers flying missions to Rabaul and other Japanese bases to the north from there would not have to overfly the Owen Stanley Range, and would not be subject to the vagaries of the weather and air turbulence over the mountains. For that reason, an airstrip suitable for heavy bombers was desired so that they could stage there from Port Moresby and bases in northern Australia.

The Commander in Chief of Allied Land Forces, General Sir Thomas Blamey, selected a garrison for Boston on 24 May. The troops were informed that their mission was only to defend against Japanese raids, and in the event of a major attack they would destroy everything of value and withdraw. The Boston project fell through, as a reconnaissance of the area gave an unfavourable report and Elliott-Smith suggested Milne Bay as a more suitable alternative site. A party of twelve Americans and Australians set out to explore Milne Bay in a Consolidated PBY Catalina flying boat on 8 June. They were impressed by the flat areas, the roads and the jetties, all of which would ease airbase construction. On receipt of a favourable report from the party, MacArthur's General Headquarters (GHQ) cancelled Boston on 11 June and substituted Milne Bay. Milne Bay was given the codename "Fall River". The use of place names as code names proved to be unwise, as some supplies were mistakenly sent to the real Fall River, in Massachusetts.