This action was commanded by Peng Dehuai against the Imperial Japanese Army in Central China. The battle had long been the focus of propaganda in the history of CCP but had become Peng Dehuai's "crime" during the Cultural Revolution. Certain issues regarding its launching and consequences are still controversial.

The Japanese North China Area Army estimated the strength of communist regulars to be about 88,000 in December 1939. Two years later, they revised the estimate to 140,000. On the eve of the battle, the Communist forces grew to 200,000 - 400,000 men strong, in 105 regiments. The extraordinary success and expansion of the 8th Route Army against the Japanese had Zhu De and the rest of the military leadership hoping that they could engage the Japanese army and win.

By 1940, growth was so impressive that Zhu De ordered a coordinated offensive by most of the communist regulars (46 regiments from the 115th Division, 47 from the 129th, and 22 from the 120th) against the Japanese-held cities and the railway lines linking them. According to CCP's official statement, the battle started on 20 August. From 20 August to 10 September, communist forces attacked the railway line that separated the communist base areas, chiefly those from Dezhou to Shijiazhuang in Hebei, Shijiazhuang to Taiyuan in central Shanxi, and Taiyuan to Datong in northern Shanxi. Originally Peng Dehuai's order of battle consisted of 20 regiments and on 22 August he found more than 80 regiments took part, mostly without telling him.

They succeeded in blowing up bridges and tunnels and ripping up track, and went on for the rest of September to attack Japanese garrisons frontally. About 600 mi (970 km) of railways were destroyed, and the Jingxing coal mine-which was important to the Japanese war industry-was rendered inoperative for six months. It was the greatest victory the CCP fought and won during the war.

However, from October to December, the Japanese responded in force, reasserting control of railway lines and conducting aggressive "mopping up operations" in the rural areas around them. On 22 December, Mao Zedong told Peng Dehuai "Don't declare the end of the offensive yet. Chiang Kai-shek is launching anti-communist climax and we need the influence of Hundred Regiment Battle to win propaganda."