During World War II, the increase in quantity and complexity of equipment exposed the flaws in this system. Pursuant to the recommendation of a Committee on Skilled Men in the Services chaired by William Beveridge, the Corps of Royal Electrical and Mechanical Engineers was formed on 1 October 1942.

Such a major re-organisation was too complex to be carried out quickly and completely in the middle of a world war. Therefore, the changeover was undertaken in two phases. In Phase I, which was implemented immediately, REME was formed on the existing framework of the RAOC Engineering Branch, strengthened by the transfer of certain technical units and tradesmen from the RE and RASC.At the same time a number of individual tradesmen were transferred into REME from other corps.

The new corps was made responsible for repairing the technical equipment of all arms with certain major exceptions.REME did not yet undertake:Those repairs which were carried out by unit tradesmen who were driver/mechanics or fitters in regiments and belonged to the unit rather than being attached to it.Repairs of RASC-operated vehicles, which remained the responsibility of the RASC; each RASC Transport Company had its own workshop.Repairs of RE specialist equipment, which remained the responsibility of the RE.