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30 July, just shortly after their arrival, the troops of the Australian battalion were not permitted by the Australian chief of staff to participate in an operation with the 173d Airborne Brigade. Instead, in order to provide the airborne brigade with a third battalion to secure its artillery and fulfill the reserve role, a battalion from the U.S. 2d Brigade, 1st Infantry Division, was used. For all practical purposes this restriction was removed on 11 August 1965 when Brigadier O.D. Jackson, commander of the Australian Army Force, Vietnam, notified General Westmoreland that his superiors had expanded the Australian contingent's area of operations to encompass those provinces contiguous to Bien Hoa Province. A military working agreement had already been signed between Brigadier Jackson and General Westmoreland on 5 May that gave operational control of the Australian troops to the U.S. commander. The United States also agreed to provide complete administrative and logistical support. In a financial agreement concluded on 7 September, the Australian government agreed to repay the United States for this support. Additional combat and support troops became available on 30 September when a 105-mm. howitzer battery, a field engineer troop, an armored personnel carrier troop, a signal troop, and an air reconnaissance flight arrived to augment the battalion. At the end of 1965 the Australian strength in South Vietnam was 1,557.

The first contingent had hardly settled down before the Australian government began to consider increasing the size of its task force. Through their respective embassies in Saigon, the U.S. and Australian ambassadors held low key talks in December 1965 and again in January 1966, but the fear of public criticism initially kept the government of Australia from openly discussing plans to increase its military commitment to South Vietnam. On 8 March, however, the Australian government publicly announced that it would increase the one-battalion force to a two-battalion force with a headquarters, a special air service squadron, and armor, artillery, engineer, signal, supply and transport, field ambulance, and ordnance and shop units. At the same time the government suggested that the Australian Caribou flight, along with eight UH-1B helicopters, be given the primary mission of supporting the Australian task force. This commitment raised the Australian troop strength to slightly over 4,500.

General Westmoreland tentatively decided that the Australian task force would be based at Ba Ria, the capital of Phuoc Tuy Province, and placed under the control of the II Field Force