Afterwards Ivanov returned to Berlin, where he met a couple of additional emigres interested in joining his not-yet-existing unit; a thirty-year-old I. Saharov, a much decorated (in the Spanish Civil War) son of a Czarish general, and a former Polkovnik (Regimental Commander) of the Czarish army named K. G. Kromiadi. The two agreed to become officers in Ivanov's future formation.

This formation did not came into existence until March of 1942. Ivanov was rewarded for his efforts by being appointed the new unit's political leader, in additon to also becoming its liaison officer with the Germans. Saharov became Ivanov's representative. Kromiadi, under the alias of "Sanin", as the camp commandant became the de facto military leader of the new formation. The unit was officially designated as "Russian Battalion for Special Duty". The military camp where the unit was garrisoned (the so-called EFC) was located at Ossintorf, near the Orsha-Smolensk rail line. The surrounding area was very forested and shwampy, while the camp consisted of a large complex of barracks that were sufficient to house 10 000 men. The "Battalion" was organized along Russian lines, it was equipped entirely with captured Soviet arms, and its personnel wore Red Army uniforms to which shoulder straps had been attached alongside with the white-blue-red cockades (in the Czarish style).

The unit's Russian members wrongly assumed that they formed a nucleus of a future great Russian "liberation" army; therefore, they decided (without prior German approval) to name their embryonic formation as the Russkaya Natsionalnaya Narodnaya Armiya (Russian Nationalist National Army) or RNNA in abbreviation. By July of 1942 the "army" grew to 3 000 personnel, and by the end of 1942 it had some 7 000 Russians within its ranks. At the beginning it included four infantry battalions, an artillery battalion, and an engineer battalion. Every battalion had an NCO's training school, while the "army's" central staff had an officers school. A library, along with an officers club, was also constructed. Even a special newspaper was printed for the formation, which promoted "Russian nationalism" and it was called Rodina ("The Homeland").

Soldiers and officers for the self-proclaimed RNNA were selected at POW camps, and presumably there was no shortage of volunteers. Most volunteers joined to escape starvation at the brutal German POW camps. Some additional emigres also decided to join RNNA; they included Lieutenant V. Ressler, Lieutenant Count G. Lamsdorff, and Lieutenant Count S. von der Pahlen. Nevertheless, virtually the whole unit consisted of former Red Army troops; among them were seven colonels and regimental commanders. A former Soviet General Staff Major named Ril was appointed RNNA's chief of staff; Colonel Gorski, commander of the artillery battalion; Colonel Kobtsov along with Majors Ivanov (some other Ivanov), Golovinkin, and Nikolayev, became commanders of the infantry battalions; Major Bocharov became the chief of intelligence.

The formation's first major engagement took place in May of 1942, in the Yelnia area (east of Smolensk). Some 300 RNNA-men under Bocharov's leadership were assigned the task of probing the encircled Soviet corps under General Bielov. This encircled pocket consisted of elements of the Soviet 33-rd Army, as well as of the 1-st Guards Cavalry Corps, and the 4-th Airborne Assault Corps, and it posed a serious threat to the rear area of the German 4-th Panzer Army; thus, jeopardizing its drive on Moscow. Bielov's troops fought a successful diversion operation for a period of six months before their pocket was liquidated. A portion of the encircled Soviet troops (including Bielov) succeeded in piercing the encirclement ring in the north-west and escaped to the Soviet lines of the 4-th Assault Army that was stationed in the Vielizh area. Others escaped to the south where they joined the partisans. General Bielov went on to command the Soviet 61-st Army until the war's end. During this engagement Bocharov's men clashed with the elements of that corps, and Major Bocharov was temporarily captured. Later he was recaptured and the operation was successfully concluded, albeit it was only a partial success.

Additional victories were won by RNNA's other units led by Lamsdorff, Ril, and Grachov. One battalion was also moved to Shklov, for security duties in that district. The administrative responsibilities were also transferred to Russian personnel. The Chief of Staff of the Army Group "Center", General Wohler, paid an official visit to the unit in June of 1942. Because of a personal conflict between General Wohler and Gotting-Seeburg, the latter was relieved as the formation's German commander and was replaced by the much less Russophile Colonel Hotzel. The new commander was not very friendly towards his Russian subordinates, and they did not like him either. In August of 1942, the German High Command ordered all the Russian emigres to leave all the occupied areas of Soviet Union, and this also meant that the very popular Colonel Kromiadi, along with the few other emigre officers, had to leave as well.

The "army's" emigre commanders were replaced by G. N. Zhilenkov and V. Boyarski. Prior to WWII Zhilenkov was a prominent Communist Party secretary of a district of Moscow. In 1941 he was made a political commissar of a brigade of the 32-nd Army. After being captured near Smolensk, he did not reveal his background to the Germans and volunteered to become a Hiwi (Wehrmacht Auxiliary). Later however he acknowledged his priviliged background in order to escape execution. From that point on, Zhilenkov's collaboration with the Germans achieved even greater dimensions. Boyarski was, prior to his capture by the Germans, a colonel who served on the Soviet General Staff, and later became commander of the 41-st Guards Division. Both traitors became close friends of General Vlasov early in their captivity. Zhilenkov assumed RNNA's leadership on 26 August, 1942.

After proving their fighting abilities during the operation against General Bielov's Corps and in other "commando" and security actions, RNNA was attached to the German Army Group "Center" under the official designation of "Experimental Formation Center". By December of 1942 the EFC/RNNA was approximately the size of a German brigade, and it was sufficiently trained to enter front-line duty. When on 16 December the Germans were in a great need of reinforcements, Colonel von Tresckow (an operations officer on the staff of the German Army Group "Center" and a supporter of the so called Russian "liberation" movement) asked Field Marshal von Kluge to allow EFC to enter front-line combat. Soon von Kluge personally inspected the EFC, and was impressed by what he saw. Nevertheless, he issued an order which stipulated that the formation be disbanded into individual battalions that would be assigned to separate German units. The Russian uniforms were also to be replaced by German ones.

These actions were in line with Hitler's order to keep all the units of Soviet turncoats no bigger than of a battalion size, however, they were unthinkable to the members of EFC (or RNNA as they unofficially called their formation). In fact the EFC/RNNA almost mutinated in protest, since they saw themselves as an embryo of a future huge Russian army of liberation from Stalinism, while the breaking-up of EFC would most likely put an end to any such hopes. If dispersed among the German troops, the EFC/RNNA would have been relegated to nothing more than the already existing and numerous Hiwi units that were devoid of any real political and policy-making power and influence.

A very uneasy compromise was reached when it was decided that Zhilenkov and Boyarski would be, instead of being court-martialled for insubordination and mutiny, sent to Berlin to work as "propagandists". Consequently, Major Ril was promoted to colonel and became the commander, while Major Besrodny became the chief of staff. The EFC was not broken-up and neither it was sent to the front-line. Nevertheless, some permanent damage was inflicted as 300 RNNA-men fled to the partisans during a single night alone. The Russian personnel that remained no longer trusted the Germans.

Following the whole incident, what was left of EFC/RNNA was transferred to the Bobruisk-Mogilev area for security and anti-partisan duties. Eventually von Kluge's disbandment order for EFC was carried-out, and the formation was broken-up into four battalions. Later they were visited by the renegade General Vlasov. The commander of the "Volga" Battalion was some colonel named A. Doschkevitz.