On his return to Japan, Sugiyama was promoted to lieutenant colonel, and commander of the 2nd Air Battalion in December 1918. He was a strong proponent of military aviation, and after his promotion to colonel in 1921, became the first head of the Imperial Japanese Army Air Service in 1922. From 1924, he became a protege of Army Minister Ugaki Kazushige. In May 1925, Sugiyama became a major general and Director of the Bureau of Military Affair in 1928. He was also a participant in the March incident of 1931, a failed coup-d'etat which attempted to make Ugaki Prime Minister. Later that year, as Under Secretary of the Army he made an official announcement defending the actions of the army in the Mukden Incident.