Winter War
Soviet aircraft bombed Finnish vessels and harbours and dropped mines into Finnish seaways. Still, only five merchant ships were lost to Soviet action. World War II, which had started before the Winter War, proved more costly for the Finnish merchant vessels, with 26 lost due to hostile action in 1939 and 1940.

Coastal artillery: Finnish coastal artillery batteries defended important harbours and naval bases. Most batteries were left over from the Imperial Russian period, with 152 mm (6.0 in) guns being the most numerous. Finland attempted to modernise its old guns and installed a number of new batteries, the largest of which featured a 305 mm (12.0 in) gun battery on the island of Kuivasaari in front of Helsinki, originally intended to block the Gulf of Finland to Soviet ships with the help of batteries on the Estonian side.
The first naval battle occurred in the Gulf of Finland on 1 December, near the island of Russarö, 5 km (3.1 mi) south of Hanko. That day, the weather was fair and visibility was excellent. The Finns spotted the Soviet cruiser Kirov and two destroyers. When the ships were at a range of 24 km (13 nmi; 15 mi), the Finns opened fire with four 234 mm (9.2 in) coastal guns. After five minutes of firing by the coastal guns, the cruiser had been damaged by near misses and retreated. The destroyers remained undamaged, but the Kirov suffered 17 dead and 30 wounded. The Soviets already knew the locations of the Finnish coastal batteries, but were surprised by their range.
Coastal artillery had a greater effect on land by reinforcing defence in conjunction with army artillery. Two sets of fortress artillery made significant contributions to the early battles on the Karelian Isthmus and in Ladoga Karelia. These were located at Kaarnajoki on the Eastern Isthmus and at Mantsi on the northeastern shore of Lake Ladoga. The fortress of Koivisto provided similar support from the southwestern coast of the Isthmus.

Soviet breakthrough in February: 

Red Army reforms and offensive preparations: Joseph Stalin was not pleased with the results of December 1939 in the Finnish campaign. The Red Army had been humiliated in defeats by smaller Finnish forces. By the third week of the war, Soviet propaganda was already working to explain the failures of the Soviet military to the populace: blaming bad terrain and harsh climate, and falsely claiming that the Mannerheim Line was stronger than the Maginot Line, and that the Americans had sent 1,000 of their best pilots to Finland. However, the Soviets were confronted with the unavoidable reality of the poor performance of their troops against the Finns. Stalin in particular was concerned about the effects of the war on Soviet reputation. In late December, the Soviets decided to reduce their strategic objectives and focused on bringing the war to an end.
Chief of Staff Boris Shaposhnikov was given full authority over operations in the Finnish theatre, and he ordered the suspension of frontal assaults in late December. Kliment Voroshilov was replaced with Semyon Timoshenko as the commander of the Soviet forces in the war on 7 January 1940. The main focus of the Soviet attack was switched to the Karelian Isthmus. Timoshenko and Zhdanov reorganised and tightened control between different branches of service in the Red Army. They also changed tactical doctrines to meet the realities of the situation.
The Soviet forces on the Karelian Isthmus were divided into two armies: the 7th and the 13th Army. The 7th Army, now under Kirill Meretskov, would concentrate 75 per cent of its strength against the 16 km (9.9 mi) stretch of the Mannerheim Line between Taipale and the Munasuo swamp. Tactics would be basic: an armoured wedge for the initial breakthrough, followed by the main infantry and vehicle assault force. The Red Army would prepare by pinpointing the Finnish frontline fortifications. The 123rd Rifle Division then rehearsed the assault on life-size mock-ups. The Soviets shipped large numbers of new tanks and artillery pieces to the theatre. Troops were increased from ten divisions to 25–26 divisions with six or seven tank brigades and several independent tank platoons as support, totalling 600,000 soldiers. On 1 February, the Red Army began a large offensive, firing 300,000 shells into the Finnish line in the first 24 hours of the bombardment.

Soviet offensive on the Karelian Isthmus: Although the Karelian Isthmus front was less active in January than in December, the Soviets increased bombardments, wearing down the defenders and softening their fortifications. During daylight hours, the Finns took shelter inside their fortifications from the bombardments and repaired damage during the night. The situation led quickly to war exhaustion among the Finns, who lost over 3,000 soldiers in trench warfare. The Soviets also made occasional small infantry assaults with one or two companies. Because of the shortage of ammunition, Finnish artillery emplacements were under orders to fire only against directly threatening ground attacks. On 1 February, the Soviets further escalated their artillery and air bombardments.
Although the Soviets refined their tactics and morale improved, the generals were still willing to accept massive losses to reach their objectives. Soviet attacks were now being screened by smoke, heavy artillery, and armour support, but the infantry charged in the open and in dense formations. Unlike their tactics in December, Soviet tanks advanced in smaller numbers. The Finns could not easily eliminate tanks if infantry troops protected them. After 10 days of constant artillery barrage, the Soviets achieved a breakthrough on the Western Karelian Isthmus in the Second Battle of Summa.
By 11 February, the Soviets had approximately 460,000 soldiers, 3,350 artillery pieces, 3,000 tanks and 1,300 aircraft deployed on the Karelian Isthmus. The Red Army was constantly receiving new recruits after the breakthrough. Opposing them, the Finns had eight divisions, totalling about 150,000 soldiers. One by one, the defenders' strongholds crumbled under the Soviet attacks and the Finns were forced to retreat. On 15 February, Mannerheim authorised a general retreat of the II Corps to a fallback line of defence. On the eastern side of the isthmus, the Finns continued to resist Soviet assaults, achieving a stalemate in the battle of Taipale.

Peace negotiations: Although the Finns attempted to re-open negotiations with Moscow by every means during the war, the Soviets did not respond. In early January, Finnish communist Hella Wuolijoki contacted the Finnish Government. She offered to contact Moscow through the Soviet Union's ambassador to Sweden, Alexandra Kollontai. Wuolijoki departed for Stockholm and met Kollontai secretly at a hotel. On 29 January, Molotov put an end to the puppet Terijoki Government and recognized the Ryti–Tanner government as the legal government of Finland, informing it that the USSR was willing to negotiate peace.
By mid-February, it became clear that the Finnish forces were rapidly approaching exhaustion. For the Soviets, casualties were high, the situation was a source of political embarrassment to the Soviet regime, and there was a risk of Franco-British intervention (which was overestimated by Soviet intelligence in February and March 1940). With the spring thaw approaching, the Soviet forces risked becoming bogged down in the forests. Finnish Foreign Minister Väinö Tanner arrived in Stockholm on 12 February and negotiated the peace terms with the Soviets through the Swedes. German representatives, not aware that the negotiations were underway, suggested on 17 February that Finland negotiate with the Soviet Union.
Both Germany and Sweden were keen to see an end to the Winter War. The Germans feared losing the iron ore fields in Northern Sweden and threatened to attack at once if the Swedes granted the Allied forces right of passage. The German invasion plan, named Studie Nord, was later implemented as Operation Weserübung. Leon Trotsky opined after the war that Hitler would view a Soviet occupation of Finland as a threat to this plan. Any potential German plans for bases in Finland would also be thwarted if the Soviets occupied Finland, though Trotsky himself believed that Hitler was not interested in occupying Finland, but rather its role as a buffer between Germany and the USSR.
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.