The 163rd Rifle Division was formed as an infantry division of the Red Army just before the Second World War began, in the Tula Oblast, based on the pre-September 13, 1939 shtat (table of organization and equipment). As a reinforced rifle division, it took part in the Winter War with Finland, where it was encircled at Suomussalmi. Despite a rescue attempt by the 44th Rifle Division from the Raate Road (which was also the route used by some of the 163rd's forces) the division was largely destroyed in one of the best-known Finnish victories of the war.
What little remained of the 163rd was moved postwar to Novgorod in the Leningrad Military District to be rebuilt as a motorized division. At the outbreak of war with Germany it was assigned to 1st Mechanized Corps and was part of the reserves of the redesignated Northern Front. In common with most Soviet motorized divisions it was significantly short of trucks and its outdated tanks were lost, mostly to breakdowns, before the end of August. During that month, as part of 34th Army, it took part in the Northwestern Front's counterstrike at Staraya Russa which briefly surrounded two German divisions and inflicted a considerable delay on Army Group North's advance on Leningrad, although at heavy cost.
On September 15 reality was acknowledged and the 163rd was again formed as a regular rifle division. Along with its Army it was forced back toward, and then past, the town of Demyansk, and it would be involved in the fighting around the German-held salient until early 1943. It was then removed to the Reserve of the Supreme High Command and moved south to join the 27th Army in Steppe Military District, soon renamed Steppe Front. By the time it entered the fighting after the German Kursk offensive it was in Voronezh Front and helped to create a major breach in the German lines in early August. As this was exploited the division was briefly transferred to 6th Guards Army and, before that Army was moved north, transferred again to 38th Army, still in Voronezh (soon 1st Ukrainian) Front. Under this command it gained a battle honor for taking the city of Romny. It then closed on the Dniepr south of Kyiv and prepared to force a crossing. After frustrating battles through October it played a leading role in taking the Ukrainian capital and was awarded its name as a second honorific. Following this, the 163rd was ordered to advance in the direction of Zhytomyr but was engaged by German counterattacks in the Fastiv area, being transferred to 40th Army as part of a general regrouping. In January 1944 it was diverted southward to take part in the encirclement battle near Cherkasy, and then advanced through western Ukraine toward the upper Dniestr River. In a period of less than 5 weeks the 163rd was awarded the Order of the Red Banner, the Order of Suvorov, and the Order of Lenin. Now part of 2nd Ukrainian Front it saw little service in the Front's spring campaign into Moldova, and was transferred back to 27th Army prior to the start of the August offensive toward Romania. It would remain in this Army for the duration of the war. The division took part in the defeat of the German 6th Army and earned its fourth decoration, the Order of Kutuzov, for its part in the capture of Ploiești at the end of the month. After Romania came over to the Allied forces the 27th Army entered Hungary, but did not directly participate in the fighting for Budapest. The 163rd moved, with its Army, over to 3rd Ukrainian Front in February 1945 and remained under that command into the postwar. It was one of the most highly decorated regular rifle formations when the war ended, and was moved back into Ukraine, where it was converted into a mechanized division in March 1947.