Although the Great War marked the demise of the cavalry, the inter-war years still saw the new Regiment serving as cavalry in India, Egypt and Scotland. While in Risalpur, now Pakistan, the 16th/5th Lancers held their last mounted parade and handed over their horses before returning to England in January 1940.
On their return, the 16th/5th were brigaded with the 17th/21st Lancers and 2nd Lothian and Border Horse. This formation was to remain together throughout the Second World War. Initially designated the 1st Motor Machine Gun Brigade employed in anti-invasion duties in Kent and Essex, in November 1940 it was re-designated 26th Armoured Brigade, part of 6th Armoured Division.
Training on their new Valentine and Matilda tanks took place during 1941 and early 1942, before their deployment to North Africa.