During the Six-day War with Israel in June 1967, Egypt had lost control of the Sinai Peninsula.

In an attempt to regain the territory, Egyptian President Anwar Sadat carried out a surprise attack on 6 October 1973. The attack was supported by the Syrians and met with initial success when more than 80,000 Egyptian troops breached the fortifications set up by the Israelis and took control of the Sinai territory. After two days, the Egyptians were forced to retreat when the Israeli army counterattacked and surrounded the Egyptian forces.

The war ended in a cease-fire brokered by the United States. The assault proved unsuccessful in liberating the Sinai Peninsula, but the conflict directly led to talks at Camp David organised by US President Jimmy Carter. These talks resulted in the Israeli-Egyptian peace treaty of 1979 which eventually saw the return of the Sinai Peninsula to Egypt.

The holiday is marked by large military parades and fireworks. It was during one of the parades on Armed Forces Day in 1981, when President Anwar Sadat was assassinated by opponents of the peace with Israel.