Tempe Gorge, on the eastern coast of Greece, was the site of a rearguard action fought by Australian and New Zealand troops on 18 April 1941. The gorge is formed where the Pinios River, on its way to the sea, cuts through the coastal mountain range, to the south-east of Mount Olympus. Its name is derived from the village of Tempe that stands at its western end. In 1941, both a railway and road used the gorge to cross inland from the coast and connect with the town of Larissa. Larissa was a vital junction at which several other roads and railways converged and through which British and Commonwealth forces retreating from northern Greece had to pass. In order to protect Larissa long enough for this to occur, the 16th Australian Brigade, minus the 2/1st Battalion, but with the 21st New Zealand Battalion under its command, was deployed to prevent German movement through the gorge. The defenders took up positions on the slopes to the south - the New Zealanders overlooking the gorge itself and the 2/2nd and 2/3rd Battalions covering the western end where it opened onto a plain known as the Vale of Tempe.
The Germans launched a two pronged attack on the morning of 18 April. Troops from the 2nd Armoured Division attacked along the gorge from the east, while two regiments of the 6th Mountain Division that had moved through the mountains attacked from the north towards the Vale of Tempe. By midday, the New Zealanders had been forced to yield the gorge to Germans and withdrew in scattered parties, either across the hills to the south or through the 2/2nd Battalion's positions. A lull in the fighting occurred for a few hours before the Germans renewed their attack on the 2/2nd mid-afternoon. Attacks from across the river were beaten off but the resolute drive of the German armour down the road, combined with a German outflanking movement to the west that was assisted by the premature withdrawal of part of the 2/3rd Battalion, brought about the collapse of the 2/2nd's position. After 6 pm its withdrew in parties of varying sizes across the hills to the south, with German troops in close pursuit; the battalion never fought as a whole again for the rest of the campaign.
In the hours after the capture of Tempe Gorge, the 2/3rd Battalion, a company of the 2/2nd, and an assorted group of other Australian and New Zealand troops fought as a mobile rearguard down the road towards Larissa, sometimes engaging the German tanks at almost point-blank range. By dawn this force had been scattered and outflanked, but the main withdrawal through Larissa had been completed without incident.