After the war, Mackay studied physics at the University of Cambridge under Ernest Rutherford before returning to Australia and his old job as a lecturer at the University of Sydney. From 1933 to 1940 he was headmaster of Cranbrook School, Sydney. He remained in the Militia between the wars, and was a major general by the time the Second World War broke out. He was selected to command the 6th Division in 1940, and led it through the Australian Army's first battles of the war. Any doubts about his ability soon disappeared with the commitment of the division to the Western Desert Campaign. During the Battle of Bardia in January 1941, the 6th Division captured the fortified town along with 36,000 Italian prisoners. In the Battle of Greece, he became the only Australian general to face the "Waffen-SS" in battle. He suffered a series of reverses in Greece, but impressed the troops under his command with his courage under fire. He was recalled to Australia in 1941 to serve as General Officer Commanding Home Forces. On 6 April 1942, he assumed command of the Second Army. During 1943 he twice commanded New Guinea Force in the fighting in the New Guinea campaign. His active service ended with his appointment as High Commissioner to India in November 1943.