On 1 July 1941, some two weeks after the invasion of the Soviet Union by Germany and its allies, Nadwórna was occupied by the Hungarian Army. A number of Jewish public officials established a committee and turned to the Hungarian military authorities with a request to prevent harassment by the Ukrainians, to no avail. Pogroms carried out by the Ukrainians in mid-July resulted in the murder of dozens of Jews. A few weeks later, some 1,000 Jews without Hungarian citizenship from the Zakarpattia region, now occupied by Hungary, were exiled to Nadwórna. The number of Jews in the city grew to 5,500.
In September 1941, Nadwórna was passed to German rule. A Judenrat was established, headed by Dr. Maksymiljan Schell and his deputy, Isaac Schapira. The Jews were ordered to wear a white armband with a blue Star of David, and some were seized for forced labor. At the same time, murder and harassment by the Ukrainians continued. Among the victims was Dr. Michael Sterer, the last head of the Jewish community before World War II.
On 6 October 1941, a mass Aktion began. Germans and Ukrainian police officers broke into Jewish homes and began to gather the residents in the square by the church. Many Jews were murdered on the way for refusing to walk to the assembly point, as well as others who tried to flee the square. In the afternoon, the Jews were taken by truck to the Bukowinka Forest, where they were shot and thrown into pits. During this Aktion, over 2,000 Jews, many of them women, children and the elderly, were murdered. In addition to Jews from Nadwórna, the victims included Jews from nearby villages as well as refugees from Zakarpattia. The victims' homes and most of their contents were given to the German occupation authorities, and the rest was plundered by local Ukrainians.
A few days after the October massacre, the remaining Jews of the city received permission from the Germans to cover the killing pits in Bukowinka, as many of the victims' bodies were still exposed. The Jews of the city fenced off the site and said a communal kaddish (prayer for the deceased) in the victims' memory.