Milford Highway, named after the commander of the 7th Australian Division, Major General Edward Milford, was a road that ran roughly north from the town of Balikpapan, on the eastern coast of Dutch Borneo, to the inland town of Samarinda. In July 1945 it formed the axis for the 25th Australian Brigade's advance out of the Balikpapan beachhead and was the site of the most difficult and costly fighting of the Balikpapan campaign.
The 25th Brigade landed at Balikpapan on 2 July 1945 and began its advance the next day. The Milford Highway was flanked by a number of hills, all codenamed prior to the landing as an aid to communications, most of which were occupied by the Japanese. The Australian advance was executed in a slow and deliberate manner, making maximum use of the fire support available, which included tanks, artillery, airstrikes and naval gunfire. The Japanese defences, however, were well-constructed and camouflaged and still inflicted heavy casualties.
The toughest fighting occurred on the hills around the village of Batuchampar. The country beside the Milford Highway was now thickly wooded, which restricted the use of tanks and lessened the effectiveness of the artillery and airstrikes. On the afternoon of 9 July the 2/31st Battalion, leading the advance, was hit by several 500 kilogram bombs detonated beside the road and then heavily engaged with machine gun fire from Cello. The battalion captured Cello the next day, but in the process of doing so lost further casualties to several command-detonated depth charges. A subsequent attack on the Japanese stronghold on Coke was unsuccessful. Having suffered over 40 casualties the previous day, the 2/31st was relieved by the 2/25th Battalion on 11 July. A lull in the fighting then occurred while the 2/25th probed with patrols to determine the extent of the Japanese defences. On 14 July the 2/25th sought to outflank the Japanese on Coke by occupying those hills further to the east and west. The Japanese counter-attacked with their usual ferocity but in ensuing days the Australian's were able to gradually encircle the Japanese. By 19 July the 2/25th Battalion had struck back towards the road on the western flank and occupied Charm, north of Coke and right beside the road; the 2/33rd Battalion were established on Cart, north-east of Coke; and the 2/31st were continuing to push slowly along the road with the tanks. In the evening of 21 July the Japanese forward posts on Coke were found abandoned; by the next morning they had withdrawn completely.
With the 25th Brigade having advanced 11 kilometres from the landing beaches, it was no considered that Balikpapan was secured and that there was little to be gained by any further pursuit of the Japanese who had withdrawn into more difficult country further north. The Australian advance halted along the line of Pope's Track that ran roughly east-west and crossed the Milford Highway just north of Charm. Only security patrols were mounted beyond this line. The intensity of the fighting along the Milford Highway can be gauged by the casualty figures - the 25th Brigade constituted a little less than a third of the combatant force for the Balikpapan campaign but suffered close to 50% of its casualties.