In June 1940, following the signing of the Molotov-Ribbentrop Pact, Bessarabia was occupied by the Soviet Union, and some Jews from Lipcani were arrested and deported into the Soviet interior as "hostile elements." In June 1941, after the outbreak of the Soviet-German war, many Jewish residents of Lipcani tried to flee eastward. One of the nearest places of refuge was the town of Briceni, which was also predominantly Jewish. Some of the residents of Lipcani managed to cross the Dniester River and escape into the Soviet heartland, but over 1,600 people were caught by the Germans and returned to Bessarabia, while an additional unknown number of fugitives were killed en route by Axis soldiers.
Romania, which had joined the war on the Axis side, regained control over Bessarabia in the summer of 1941. In July, Romanian troops arrived in the town of Lipcani, and they immediately began to round up the local Jews. According to information provided by non-Jewish residents of Lipcani, the Romanians committed a massacre throughout the town during that period, and some Jewish residents were killed in the streets. Shortly afterward, Romanian soldiers shot a group of over 200 Jewish men, women, and children in an anti-tank trench that had been dug by the Red Army on the town's outskirts.
The remaining Jewish residents were arrested by the Romanian authorities in July 1941 and imprisoned in the public bathhouse of Lipcani (or, according to another source, in the state mill). Eyewitness testimony indicates that over 1,000 people were forced into this building. The prisoners were not given food or water, and a number of them died during the confinement. The Romanian gendarmes who were guarding the building removed their bodies and buried them in unknown locations.
Lipcani was liberated by the Red Army in March 1944.