Following the Gulf of Tonkin Resolution, Hanoi anticipated the arrival of US troops and began expanding the Viet Cong, as well as sending increasing numbers of North Vietnamese personnel southwards. At this phase they were outfitting the Viet Cong forces and standardising their equipment with AK-47 rifles and other supplies, as well as forming the 9th Division. "From a strength of approximately 5,000 at the start of 1959 the Viet Cong's ranks grew to about 100,000 at the end of 1964 ... Between 1961 and 1964 the Army's strength rose from about 850,000 to nearly a million men." The numbers for U.S. troops deployed to Vietnam during the same period were much lower: 2,000 in 1961, rising rapidly to 16,500 in 1964. During this phase, the use of captured equipment decreased, while greater numbers of ammunition and supplies were required to maintain regular units. Group 559 was tasked with expanding the Ho Chi Minh trail, in light of the near constant bombardment by US warplanes. The war had begun to shift into the final, conventional warfare phase of Hanoi's three-stage protracted warfare model. The Viet Cong was now tasked with destroying the ARVN and capturing and holding areas; however, the Viet Cong was not yet strong enough to assault major towns and cities.

In December 1964, ARVN forces had suffered heavy losses at the Battle of Bình Giã, in a battle that both sides viewed as a watershed. Previously, the VC had utilised hit-and-run guerrilla tactics. At Binh Gia, however, they had defeated a strong ARVN force in a conventional battle and remained in the field for four days. Tellingly, South Vietnamese forces were again defeated in June 1965 at the Battle of Đồng Xoài.