In 1939 Derazhnya's 2,651 Jews comprised 41 percent of the total polupation of the town.
During the first days of World War II Derazhnya and its railway station were heavily bombarded. Some Jewish residents managed to leave the town during this period. The Nazis entered Derazhnya on July 11, 1941. The Germans carried out the registration of the Jewish population: their total number was 1,848 - 579 children below 14 years old, 715 work-capable men and women, and 554 people (including paraplegics) considered unfit for work. The Jews were required to wear a yellow Star of David on their chests and backs. Shortly afterwards a ghetto surrounded by a barbed wire fence was set up in the old part of the town, near Bazarnaya (Market) Square. The Jews from Derazhnya, Volkovintsy, and the surrounding towns were confined in the ghetto, which was very crowded and where contagious diseases soon spread. The ghetto inmates were made to pay various "taxes" and gold, silver, and foreign currency were confiscated from them. The Jewish men were taken from the ghetto daily to perform different types of forced labor. They were often beaten while performing this labor.
In September 1942 about 1,500 Jews - mainly women, children, and old people - were taken from the ghetto by Ukrainian auxiliary policemen and members of the Gendarmerie and shot to death outside the town. During this period 200 skilled Jewish workers and able-bodied men from Derazhnya were sent to the Letichev labor camp and another 300 - elsewhere. In September – October 1942 over two hundred Jews, apparently craftsmen and those found in hiding, were shot to death at the old Jewish cemetery.
Derazhnya was liberated by the Red Army on March 25, 1944.