Terauchi spent time in Germany and worked as a lecturer at the Military Academy before taking command of the 5th Division and the chief of staff of the Korea Army. Later he become head of the Formosa Army.
In October 1935 he was promoted to full general. Two years later he was the army's choice as war minister. He returned to the Japanese Army when he was given command of the forces in North China.
Terauchi took control of the Southern Army on 6th November 1941 and soon afterwards began devising war plans with Admiral Isoruku Yamamoto.
After leading the conquest of the Southern Area he established his headquarters in Singapore. Promoted to field marshal, he moved to the Philippines in May 1944. When this area came under threat he retreated to Saigon. After receiving bad news about Burma he suffered a stroke on 10th April 1945.