Winter War
As the Finnish Cabinet hesitated in the face of harsh Soviet conditions, Sweden's King Gustav V made a public statement on 19 February in which he confirmed having declined Finnish pleas for support from Swedish troops. On 25 February, the Soviet peace terms were spelt out in detail. On 29 February, the Finnish Government accepted the Soviet terms in principle and was willing to enter into negotiations. Red Army commanders wished to continue the war as their forces were starting to make progress against the Finns, whereas the Communist Party pointed out that the war was becoming too costly and called for the signing of a peace treaty. The party believed that Finland could be taken over later by means of a revolution. The heated discussion that ensued failed to yield any clear result and the matter went to a vote, in which the party's opinion prevailed and the decision was taken to bring hostilities to an end.

End of war in March: On 5 March, the Red Army advanced 10 to 15 km (6.2 to 9.3 mi) past the Mannerheim Line and entered the suburbs of Viipuri. The same day, the Red Army established a beachhead on the Western Gulf of Viipuri. The Finns proposed an armistice on 6 March, but the Soviets, wanting to keep the pressure on the Finnish government, declined the offer. The Finnish peace delegation travelled to Moscow via Stockholm and arrived on 7 March. They were disappointed to find that Stalin was not present during peace negotiations, likely due to the Red Army's humiliation by the Finns. The Soviets had further demands, as their military position was strong and improving. On 9 March, the Finnish military situation on the Karelian Isthmus was dire, as troops were experiencing heavy casualties. Artillery ammunition was exhausted and weapons were wearing out. The Finnish government, realizing that the hoped-for Franco-British military expedition would not arrive in time, as Norway and Sweden had not given the Allies right of passage, had little choice but to accept the Soviet terms. Finnish President Kyösti Kallio resisted the idea of giving up any territory to the Soviet Union, but eventually agreed to sign the Moscow Peace Treaty. When he signed the document, the tormented president uttered the well-known words: "Let the hand wither that signs this monstrous treaty!"

Moscow Peace Treaty: The Moscow Peace Treaty was signed in Moscow on 12 March 1940. A cease-fire took effect the next day at noon Leningrad time, 11 a.m. Helsinki time. With it, Finland ceded the Karelian Isthmus and most of Ladoga Karelia. The area included Viipuri (Finland's second-largest city [Population Register] or fourth-largest city [Church and Civil Register], depending on the census data), much of Finland's industrialised territory, and significant land still held by Finland's military – all in all, nine per cent of Finnish territory. The ceded territory included 13 per cent of Finland's economic assets. 12 per cent of Finland's population, 422,000 to 450,000 Karelians, were evacuated and lost their homes. Finland also ceded a part of the region of Salla, the Rybachy Peninsula in the Barents Sea, and four islands in the Gulf of Finland. The Hanko peninsula was leased to the Soviet Union as a military base for 30 years. The region of Petsamo, captured by the Red Army during the war, was returned to Finland according to the treaty.
Finnish concessions and territorial losses exceeded Soviet pre-war demands. Before the war, the Soviet Union demanded for the frontier with Finland on the Karelian Isthmus to be moved westward to a point 30 kilometres (19 mi) east of Viipuri to the line between Koivisto and Lipola; for existing fortifications on the Karelian Isthmus to be demolished and for the islands of Suursaari, Tytärsaari, and Koivisto in the Gulf of Finland and Rybachy Peninsula to be ceded. In exchange, the Soviet Union proposed to cede Repola and Porajärvi from Eastern Karelia, an area twice as large as the territories that were originally demanded from the Finns.

Foreign support: 

Foreign volunteers: World opinion largely supported the Finnish cause, and the Soviet aggression was generally deemed unjustified. World War II had not yet directly affected France, the United Kingdom or the United States; the Winter War was practically the only conflict in Europe at that time and thus held major world interest. Several foreign organisations sent material aid, and many countries granted credit and military materiel to Finland. Nazi Germany allowed arms to pass through its territory to Finland, but after a Swedish newspaper made this public, Adolf Hitler initiated a policy of silence towards Finland, as part of improved German–Soviet relations following the signing of the Molotov–Ribbentrop Pact.
The largest foreign contingent came from neighboring Sweden, which provided nearly 8,760 volunteers during the war. The Volunteer Corps was formed of predominantly Swedes, as well as 1,010 Danes and 727 Norwegians. They fought on the northern front at Salla during the last days of the war. A Swedish unit of Gloster Gladiator fighters, named "the Flight Regiment 19" also participated. Swedish anti-air batteries with Bofors 40 mm (1.6 in) guns were responsible for air defence in northern Finland and the city of Turku. Volunteers arrived from Hungary, Italy and Estonia. 350 American nationals of Finnish background volunteered, and 210 volunteers of other nationalities arrived in Finland before the war ended. Max Manus, a Norwegian, fought in the Winter War before returning to Norway and later achieved fame as a resistance fighter during the German occupation of Norway. In total, Finland received 12,000 volunteers, 50 of whom died during the war. The British actor Christopher Lee volunteered in the war for two weeks, but did not face combat.

White émigrés and Russian prisoners-of-war: Finland officially refused overtures from the anti-Soviet Russian All-Military Union (ROVS) for aid. Nevertheless, Mannerheim eventually agreed to establish a small Russian detachment (Russkaya narodnaya armiya, RNA) of 200 men after being introduced to Boris Bazhanov, a high-ranking ROVS member, in person in January 1940. The project was deemed top secret, and was under the auspices of the intelligence division of the Finnish army headquarters.
The ranks of RNA were to be filled by prisoners-of-war, but it would be commanded by White émigrés instead of captured Soviet Army officers, who were deemed unreliable. Bazhanov's Finnish assistant Feodor Schulgin chose Captain Vladimir Kiseleff, Lieutenant Vladimir Lugovskoy, Anatoly Budyansky and brothers Nikolay and Vladimir Bastamov as officers for the unit. Of the five, the Bastamovs were not Finnish citizens, but had Nansen passports. The prisoners-of-war were trained in Huittinen, although it is possible that some were also trained in Lempäälä.
RNA never participated in battle, despite Boris Bazhanov's later claims to the contrary in his memoirs. About 35 to 40 members of it were present during a battle in Ruskeala in early March 1940, where they spread flyers and broadcast propaganda to encircled Soviet troops, but did not carry weapons. The men were subsequently detained by Finnish forces, who mistook them for Soviet infiltrators. After the war's end, Bazhanov was immediately asked to leave Finland, which he did. Finnish military historian Carl Geust presumes that most members of the RNA were executed after they were returned to the Soviet Union after the war. Additionally, Vladimir Bastamov was later extradited into the Soviet Union as one of the Leino prisoners in 1945, and was sentenced to 20 years of hard labour. He was released after Stalin's death and returned to Finland in 1956.

Franco-British intervention plans: France had been one of the earliest supporters of Finland during the Winter War. The French saw an opportunity to weaken Germany's resource imports via a Finnish counteroffensive, as both Sweden and the Soviet Union were strategic trading partners to Germany. France had another motive, preferring to have a major war in a remote part of Europe rather than on French soil. France planned to re‑arm the Polish exile units and transport them to the Finnish Arctic port of Petsamo. Another proposal was a massive air strike with Turkish co-operation against the Caucasus oil fields.
The British, for their part, wanted to block the flow of iron ore from Swedish mines to Germany as the Swedes supplied up to 40 per cent of Germany's iron demand. The matter was raised by British Admiral Reginald Plunkett on 18 September 1939, and the next day Winston Churchill brought up the subject in the Chamberlain War Cabinet. On 11 December, Churchill opined that the British should gain a foothold in Scandinavia with the objective to help the Finns, but without a war with the Soviet Union. Because of the heavy German reliance on Northern Sweden's iron ore, Hitler had made it clear to the Swedish government in December that any Allied troops on Swedish soil would immediately provoke a German invasion.
On 19 December, French Prime Minister Édouard Daladier introduced his plan to the General Staff and the War Cabinet.