The army was formed in poor circumstances, and suffered from a very limited supply of arms. Critical deficiencies included tanks and other heavy weaponry. The first commander of the army was Sefer Halilović.
1993 saw no major changes in the front lines against Serbs. Instead, this year marked the start of the Croat-Bosniak war in Central Bosnia and in Herzegovina, notably the Mostar region. Pressured and contained by heavily armed Serb forces in Bosnia-Hercegovina and Croatia, Croat forces - HVO (Croatian Defence Council) shifted their focus from defending their parts of Bosnia from Serbs to trying to capture remaining territory held by Bosnian Army. It is widely believed that this was due to the Karađorđevo agreement reached between presidents Slobodan Milošević and Franjo Tuđman to split Bosnia between Croatia and Serbia. In order to accomplish this Croatian forces would have to defeat the Bosnian Army, since the territory that they wanted was under Bosnian government control. HVO with great engagement from the Military of Republic of Croatia and material support from Serbs, attacked Bosniak civilian population in Herzegovina and in central Bosnia starting an ethnic cleansing of Bosniak populated territories (e.g. Lašva Valley ethnic cleansing). Vastly underequipped Bosnian forces, fighting on two fronts, were able to repel Croats and gain territory against them on every front. At this time, due to its geographic position, Bosnia was surrounded by Croat and Serb forces from all sides. There was no way to Import weapons or food. What saved Bosnia at this time was its vast Industrial complex (Steel and Heavy Industries) that was able to switch to military hardware production. After a short but bloody war and once Croats realized that their partnership with Serbs will not bring them any territorial gains they agreed to the US leadership's "Washington treaty" peace agreement. From that point on, Croat and Bosnian government forces continued to fight as allies against Serbs.
A renewed alliance between HVO and ARBiH was agreed upon, with the objective of forming a strong force that could fight the much stronger and better equipped VRS. This was the time of frequent peace negotiations.
Despite the loss of several enclaves, notably Srebrenica, 1995 was marked by HVO and ARBiH offensives and later by NATO intervention. Following the Split Agreement, the Croatian army, with cooperation from ARBiH and HVO, launched a series of operations: Flash,[clarification needed]Summer '95, Storm and Mistral 2. In conjunction, Bosnian forces launched operations Sana and Una '95. Bosnian and Croat armies were on the offensive in this phase, captured entire western Bosnia, and the Serb capital Banja Luka was seriously threatened, until peace negotiations stopped further bloodshed.
In the period of August–December 1995, Serb forces were defeated and driven out of the majority of Croatia and western Bosnia, and the ethnic Serb population fled from these parts.
The army was divided into Corps, each stationed in a particular territory. In 1993, most brigades were renamed as Mountain troops given that the lack of heavy weapons made it organizationally pointless to list them as infantry or motorized. In addition, Bosnian terrain favored light infantry over armored and mechanized formations.
This corps was formed in 1992 and had mayor success in holding Tuzla area and in operations like "Operation Vozuća". This was also the only corps which had direct connection at one time during the war with the Independent 81 Division.