The 20. Infanterie-Division was formed on 15 October 1935 from the cover name Reichswehrdienststelle Hamburg. The infantry regiments were formed from 6. Infanterie-Regiment of 2. Division of the Reichwehr. It was motorized in the fall of 1937 and redesignated 20. Infanterie-Division (mot).
It took part in the occupation of the Sudetenland area of Czechoslovakia in October 1938 under the command of XVI Armeekorps.
It was redesignated 20. Panzergrenadier-Division in July 1943.