The 7th Division was formed in Sapporo, Hokkaidō on 12 May 1888, as the first new infantry division formed by the reorganization of the Imperial Japanese Army from six regional commands to a divisional command structure. The reorganization was recommended by Prussian military advisor Jakob Meckel. It was responsible for the defence of Hokkaidō, which it divided into four operational areas (Sapporo, Hakodate, Asahikawa and Kushiro).
The territorial division was converted to a field infantry division on 12 May 1896, in the aftermath of the First Sino-Japanese War. On 30 October 1901, most of division's units were transferred to Takasu village in Kamikawa (Ishikari) District, Hokkaido, where previously only the 28th Infantry Regiment was located. After an extensive building project, the division moved to its new headquarters in Takasu on 21 October 1902, and 25 October 1902 the Sapporo military prison was moved to the same location.