When Phibulsonggram succeeded Phraya Phahon as Prime Minister in September 1938, the military and civilian wings of Khana Ratsadon diverged even further, and military domination became more overt. Phibunsongkhram began moving the government towards militarism, and totalitarianism, as well as building personality cult around himself.

Negotiations with France shortly before World War II had shown that the French government was willing to make appropriate changes in the boundaries between Thailand and French Indochina, but only slightly. Following the Fall of France in 1940, Major-General Plaek Pibulsonggram (popularly known as "Phibun"), the prime minister of Thailand, decided that France's defeat gave the Thais an even better chance to regain the vassal state territories that were ceded to France during King Chulalongkorn's reign. The German military occupation of Metropolitan France rendered France's hold on its overseas possessions, including French Indochina, tenuous. The colonial administration was now cut off from outside help and outside supplies. After the Japanese invasion of French Indochina in September 1940, the French were forced to allow Japan to set up military bases. This seemingly subservient behavior lulled the Phibun regime into believing that France would not seriously resist a military confrontation with Thailand.

The defeat of France in the Battle of France was the catalyst for the Thai leadership to begin an attack on French Indochina. It suffered a heavy defeat in the sea battle of Ko Chang, but it dominated on land and in the air. The Empire of Japan, already the dominant power in the Southeast Asian region, took over the role of mediator. The negotiations ended the conflict with Thai territorial gains in the French colonies of Laos and Cambodia.