During World War II, the battalion undertook garrison duties in Australia, as part of the 9th Brigade, based in New South Wales. Around November 1942, the battalion's machine gun company was detached and in conjunction with several other Militia machine gun companies, it was used to form the 6th Machine Gun Battalion. Although there were reductions amongst the home forces as the war progressed, the 17th Battalion remained on the Australian order of battle until 6 April 1944 when it was disbanded, having not seen active service during World War II, as the Australian Army sought to reallocate manpower back to industry or to other units that were engaged in combat operations in the Pacific.