It was formed in August–September 1940, after the forced annexation of Latvia to the USSR, based on the Kurzeme and Vidzeme Divisions of the Latvian Army. The division wore the old uniforms of the Latvian Army with Soviet insignia and were also equipped with weaponry of the former army, which made them stand out from other units of the Red Army. It became part of the 24th Rifle Corps. It was stationed in Riga.
It was part of the 'operational army' during World War II from 22 June 1941 to 16 October 1941.
On June 22, 1941, it was stationed at summer camps in the Gulbene area in an abbreviated format. Here until July 29, the division was expanded to full wartime strength.[citation needed]
From the beginning of the war desertion of Latvians began, and from June 29, 1941, according to some sources, they began their demobilization. More precisely, Latvians were simply released from house to house, previously disarmed - all more than 2,000 people (mostly from old time required). The division was completed with personnel of the interior regions of the USSR.[citation needed] The main body (about 30% of the total force) came from the central and southern areas of the current Pskov Oblast. However, the core personnel were Latvian. The combat training level of the Latvian Riflemen was quite high - many of them received awards and honors from the commanders in the war, including for their period of stay in the 181st Division.
The division was wiped out at Staraya Russa in September 1941.
The division was formally disbanded after defeats during Operation Barbarossa on 16 October 1941.