The 'Battle of Petsamo' was fought between Soviet and Finnish forces in the extreme north of Finland as the northernmost element of the Soviet offensive known to the Finns as the 'Talvisota' winter war (30 November 1939/12 March 1940).

The Finnish forces, totalling a mere three companies, were greatly outnumbered but managed sometimes to contain and generally to slow the Soviet troops as a result of their exploitation of the extreme terrain, difficult weather and excellent tactical leadership.

The Finnish troops comprised the 10^th Separate Company (10^th Er.K.) in Parkkina and the 5^th Separate Battery (5^th Er.Ptri.) with four 76-mm (3-in) guns, dating from 1887, in Liinahamari. The separate company and battery belonged to no specific division of the Finnish army, and could be considered as ad hoc units for wholly detached service. The units were part of the Finnish army’s Lapin Ryhmä (Lapland Group) headquartered in Rovaniemi. The troops were later reinforced with the 11^th Er.K. and the 3^rd Er.K. which were not part of Finland’s original mobilisation plans. Another later addition was the small 11^th Tiedusteluosasto (11^th Reconnaissance Group). All these units, totalling fewer than 900 men, constituted the Osasto 'Pennanen' ('Pennanen' Detachment) commanded by Kapteeni Antti Pennanen.

The USSR had in the Kola peninsula Komkor Valerian A. Frolov’s 14^th Army of Komandarm 2-ranga Kyrill A. Meretskov’s Leningrad Military District. The army comprised the 104^th Division, 52^nd Division and 14^th Division, totalling some 52,500 men. Only the 104^th Division and 52^nd Division took part in the operation to take Petsamo, the 14^th Division being retained to occupying Liinahamari harbour. The Soviets had an overwhelming superiority in troops in the area, but most Soviet troops were preparing to fight against a possible British and French landing near Murmansk and were not involved in the fight against Finland.

Elements of the 104^th Division crossed the border into Finland on 30 November 1939 and occupied the Finnish part of the Rybachiy peninsula. The division’s 242^nd Regiment reached Parkkina on 1 December as the Finnish troops withdrew to Luostari. The 52^nd Division was moved to Petsamo by sea, took over the main role in the offensive and pushed the Osasto 'Pennanen' back to Höyhenjärvi, where the Soviet attack was halted on 18 December. During the following two months the Soviet forces remained inactive. During this time the Finns made several reconnaissance and guerrilla raids behind the Soviet lines. After the two-month pause, the Soviet advance continued and this time attacks on 25 February forced the Finnish troops back to Nautsi near the Inari kake, and here the Soviet forces remained for the rest of the 'Talvisota'.

by the terms of the Moscow Peace Treaty of 12 March 1940, Finland had to cede parts of its territory to the USSR, and among these areas was the Finnish part of the Rybachy peninsula in the extreme north of the Petsamo region. The USSR took the whole of the Petsamo area after the 'Jatkosota' or 'Continuation War'.