At the end of May, 1940, Winston Churchill ordered the implementation of Operation Dynamo, a plan to evacuate of troops and equipment from the French port of Dunkirk, that had been drawn up by General John Gort, the Commander in Chief of the British Expeditionary Force (BEF). Between 27th May and 4th June, 1940, a total of 693 ships brought back 338,226 people back to Britain. Of these 140,000 were members of the French Army. All heavy equipment was abandoned and left in France.

Much depleted, the French Army tried to hold the line along the Somme and the Aisne. Clearly outnumbered, the troops were forced to withdraw to the Loire. Paul Reynaud and his government now left the French capital and moved to Tours.

On 14th June, the Germans occupied Paris. Reynaud now realized that the German offensive could not be halted and suggested that the government should move to territories it owned in North Africa. This was opposed by his vice-premier, Henri-Philippe Petain, and the supreme commander of the armed forces, General Maxime Weygand. They insisted that the government should remain in France and seek an armistice.

Outvoted, Reynaud resigned and President Albert Lebrun, appointed Petain as France's new premier. He immediately began negotiations with Adolf Hitler and on 22nd June signed an armistice with Germany. The terms of the agreement divided France into occupied and unoccupied zones, with a rigid demarcation line between the two. The Germans would directly control three-fifths of the country, an area that included northern and western France and the entire Atlantic coast. The remaining section of the country would be administered by the French government at Vichy under Marshal Henri-Philippe Petain.

Other provisions of the armistice included the surrender of all Jews living in France to the Germans. The French Army was disbanded except for a force of 100,000 men to maintain domestic order. The 1.5 million French soldiers captured by the Germans were to remain prisoners of war. The French government also agreed to stop members of its armed forces from leaving the country and instructed its citizens not to fight against the Germans. Finally, France had to pay the occupation costs of the German troops.