It began in the aftermath of the plebiscite which yielded mixed results. The British and French governments could not reach a consensus on the interpretation of the plebiscite. The primary problem was the disposition of the "Industrial Triangle" east of the Oder river, whose triangle ends were marked by the cities of Beuthen (Bytom), Gleiwitz (Gliwice) and Kattowitz (Katowice), all three of which where mostly inhabited by ethnic Germans. The French wanted to weaken Germany, and thus supported Polish claims on the territory; the British and the Italians disagreed, in part because the German government declared that a loss of the Silesian industries would render Germany incapable of paying the demanded war reparations.

In late April 1921, rumors spread that the British position would prevail. This caused the local Polish activists to organize another uprising. The insurrection was to begin in early in May. Having learned from previous failures, the Third Uprising was carefully planned and organized under the leadership of Wojciech Korfanty. It started on May 2–3, 1921, with the destruction of German rail bridges (see "Wawelberg Group") in order to slow down the movement of German reinforcements. A particular concern was to prevent a recurrence of violent acts against Polish civilians by members of the Freikorps, demobilised Imperial German army units that had refused to disband. These paramilitary units existed throughout Germany and usually acted independently from both the provisional official army and the leadership of the fledgling German Republic.

The Inter-Allied Commission, in which General Henri Le Rond was the most influential person, waited rather long before taking any steps to end the violence. The French troops generally favored the insurrection. In some cases British and Italian contingents actively cooperated with Germans. On the other hand, UK Prime Minister Lloyd George's speech in the British Parliament, strongly disapproving of the insurrection, aroused the hopes of some Germans. But the Entente appeared to have no troops ready and available for dispatch. The only action the 'Inter-Allied Military Control Commission' and the French government made was demanding immediate prohibition of the recruiting of German volunteers from outside Upper Silesia, and this was promptly made public.

After an initial success of the insurgents, taking over a large portion of the area of Upper Silesia, the German Grenzschutz several times resisted the attacks of Wojciech Korfanty's Polish troops, in some cases with the cooperation of British and Italian troops. An attempt on the part of the British troops to take steps against the Polish forces was prevented by General Jules Gratier, the French commander-in-chief of the Allied troops. Eventually, the insurgents kept most of territory they had won, including the local industrial district. They proved that they could mobilize large amounts of local support, while the German forces based outside Silesia were barred from taking an active part in the conflict.

Twelve days after the outbreak of the insurrection Korfanty offered to take his troops behind a line of demarcation (the "Korfanty Line"), conditional upon the released territory not being re-occupied by German forces, but by Allied troops. It was not, however, until July 1 that the British troops arrived in Upper Silesia and began to advance in company with those of the other Allies towards the former frontier. Simultaneously with this advance the 'Inter-Allied Commission' pronounced a general amnesty for the illegal actions committed during the insurrection, with the exception of acts of revenge and cruelty. The German Grenzschutz was withdrawn and disbanded.