Urbšys returned to Lithuania to consult the government. German officials confirmed that the secret protocols were real and informed Lithuanians that transfer of the territory in Suvalkija was not an urgent matter. Eventually, Nazi Germany sold rights this territory to the Soviet Union for 7.5 million dollars on January 10, 1941 in the German–Soviet Border and Commercial Agreement. Lithuanians in principle agreed to sign the mutual assistance treaty, but were instructed to resist Soviet bases as much as possible. Alternatives included doubling Lithuanian army, exchanging military missions, and building fortifications on the western border with Germany similar to the Maginot Line in France. On October 7, Lithuanian delegation, including General Stasys Raštikis and Deputy Prime Minister Kazys Bizauskas, returned to Moscow. Stalin refused the proposed alternatives, but agreed to reduce the number of Russian troops to 20,000 – about the size of the entire Lithuanian army. Russians wanted to sign the treaty right then to commemorate the 19th anniversary of the Żeligowski's Mutiny and Lithuania's loss of Vilnius. Political rallies, organized in Vilnius demanding city's incorporation into the Byelorussian Soviet Socialist Republic, put additional pressure on Lithuanians and provided a sense of urgency. Urbšys refused to sign and the talks receded for the second time.
In Lithuania, President Antanas Smetona doubted that it was worth gaining Vilnius for such a price and debated whether the negotiations could be broken off. Bizauskas argued that refusing the treaty would not prevent Soviet Union from implementing its plan. Russia had already threatened Estonia with force in case it refused its mutual assistance treaty and was gathering forces in Vilnius Region in the east and in Latvia in the north. In such light, the government decided to demand as much territory as possible. However, when the delegation returned to Moscow, it found the atmosphere changed. Russians were inflexible, refused further negotiations, and intimidated the delegation to sign the treaty. They presented a new draft, which combined the mutual assistance pact and transfer of Vilnius into one agreement. The Lithuanian delegation saw little choice but to sign the proposed treaty. After signing the treaty, Stalin invited the Lithuanian delegation to celebrate and to watch two movies with him. Urbšys informed the Lithuanian government about signing of the treaty only in the morning of October 11 – at the time the treaty was already published by Russian news agency TASS.
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