The Venona Project was initiated in 1943, under orders from the deputy Chief of Military Intelligence (G-2), Carter W. Clarke. Clarke distrusted Joseph Stalin, and feared that the Soviet Union would sign a separate peace with the Third Reich, allowing Germany to focus its military forces against Great Britain and the United States. Code-breakers of the US Army's Signal Intelligence Service (commonly called Arlington Hall) analyzed encrypted high-level Soviet diplomatic intelligence messages intercepted in large volumes during and immediately after World War II by American, British, and Australian listening posts.

The Soviet systems in general used a code to convert words and letters into numbers, to which additive keys (from one-time pads) were added, encrypting the content. When used correctly, one-time pad encryption is unbreakable. Cryptanalysis by American and British code-breakers revealed that some of the one-time pad material had incorrectly been reused by the Soviets (specifically, entire pages, although not complete books), which allowed decryption (sometimes only partial) of a small part of the traffic.

Generating the one-time pads was a slow and labor-intensive process, and the outbreak of war with Germany in June 1941 caused a sudden increase in the need for coded messages. It is probable that the Soviet code generators started duplicating cipher pages in order to keep up with demand.