In 1921 the New Zealand Naval Forces were renamed the New Zealand Division of the Royal Navy. Funded by Wellington and increasingly manned by New Zealanders, it comprised two cruisers and a training minesweeper until World War II (1939-45), when New Zealand's naval forces rapidly expanded.
The Naval Volunteers had been absorbed into the New Zealand Garrison Artillery during the first five years of the 20th Century and there had been no other Naval Reserve forces. Largely due to influential political lobbying led by Navy League President Charles Palmer, in 1925 a trial unit of the Royal Naval Volunteer Reserve was established in Auckland. Two years later, divisions were opened in Wellington, Christchurch and Dunedin. By 1939 there were 78 officers and 610 ratings enlisted in the Royal Naval Volunteer Reserve (NZ Division), and during these years 1000 men had been trained.