At the end of the World War I, the forces of the German Empire had mostly disintegrated, the men making their way home individually or in small groups. Many of them joined the Freikorps, a collection of volunteer quasi-military units that were involved in revolution and border clashes between 1918 and 1923.
The newly-formed Weimar Republic did need a military though, and on 6 March 1919 a decree established the Vorläufige Reichswehr ("Provisional German Defense Force"), consisting of a Vorläufige Reichsheer (Provisional Reich Army) and a Vorläufige Reichsmarine (Provisional Reich Navy). About 400,000 men served in the Reichsheer.
On 30 September, the army was reorganized as the Übergangsheer ("Transitional Army"). This lasted until 1 January 1921, when the Reichswehr was officially established according to the limitations imposed by the Treaty of Versailles.
Limited by treaty to a total of 100,000 men, the Reichswehr was composed of the Reichsheer, an army consisting of two group commands, seven infantry divisions, and three cavalry divisions, and the Reichsmarine, a navy limited to a handful of ships.
Despite the limitations on size, research and development went on, and during this time many of the future leaders of the Wehrmacht, for instance, Heinz Guderian, first formulated the ideas that they were to use so effectively a few years later.