The political instability in Saigon gave North Vietnamese leaders an opportunity to step up their military campaign in the south. They believed that the South Vietnamese government's power relied on the country's strong military, so the North Vietnamese People's Army of Vietnam (PAVN) and VC launched the Summer Offensive of 1965 to inflict significant losses on South Vietnamese forces. In Phước Long Province, the PAVN/VC summer offensive culminated in the Đồng Xoài campaign.

The fight for Đồng Xoài began on the evening of June 9, 1965, when the VC 272nd Regiment attacked and captured the Civilian Irregular Defense Group and U.S. Special Forces camp there. The Army of the Republic of Vietnam (ARVN) Joint General Staff responded to the sudden assault by ordering the ARVN 1st Battalion, 7th Infantry Regiment, 5th ARVN Infantry Division to retake the district of Đồng Xoài. The ARVN forces arrived on the battlefield on June 10, but in the vicinity of Thuận Lợi, the VC 271st Regiment overwhelmed the South Vietnamese battalion. Later that day, the ARVN 52nd Ranger Battalion, which had survived an ambush while marching towards Đồng Xoài, recaptured the district. On June 11, the ARVN 7th Airborne Battalion arrived to reinforce the South Vietnamese position; as the paratroopers were searching the Thuận Lợi rubber plantation for survivors from the 1st Battalion, the VC caught them in a deadly ambush.