After Indian police killed Chief Sitting Bull while trying to arrest him on December 15th on the Standing Rock Reservation, his Hunkpapa band of the Lakota tribe grew agitated and troop reinforcements arrived.

When 200 of the Indians fled southward to the Cheyenne River, military officials feared a Hunkpapa-Miniconjou coalition. Most of the Standing Rock fugitives allied for a time with the Miniconjou Chief Hump and his 400 followers before joining them in surrendering at Fort Bennett, South Dakota.

About 38 of the Hunkpapa joined a more militant group of 350 or so Miniconjou Ghost Dancers led by Chief Big Foot. After a few days of defiance, Big Foot, ill with pneumonia, informed military authorities he would surrender. When he failed to do so at the appointed time and place, General Nelson A. Miles ordered his arrest. On December 28th, a 7th Cavalry detachment under Major Samuel M. Whitside intercepted him and his band southwest of the badlands at Porcupine Creek and escorted them about five miles westward to Wounded Knee Creek, the place where Big Foot said he would surrender peacefully. Early that night, Colonel James W. Forsyth arrived to supervise the operation and the movement of the captives by train to Omaha, Nebraska via the Pine Ridge Agency. His force, totaling more than 500 men, included the entire 7th Cavalry Regiment, a company of Oglala scouts, and an artillery detachment.

The disarming occurred the next day. It was not a wise decision, for the Indians had shown no inclination to fight and regarded their guns as cherished possessions and means of livelihood. Between the teepees and the soldiers' tents was the council ring. On a nearby low hill a Hotchkiss battery had its guns trained directly on the Indian camp. The troops, in two cordons, surrounded the council ring.

The warriors did not comply readily with the request to yield their weapons, so a detachment of troops went through the teepees and uncovered about 40 rifles. Tension mounted, for the soldiers had upset the teepees and disturbed the women and children; and the officers feared the Indians were still concealing firearms. Meanwhile, the militant medicine man, Yellow Bird, had circulated among the men urging resistance and reminding them that their "ghost shirts" made them invulnerable. When the troops attempted to search the warriors,  the rifle of a man named Black Coyote, considered by many members of his tribe to be crazy, apparently discharged accidentally when he resisted. Yellow Bird gave a signal for retaliation, and several warriors leveled their rifles at the troops, and may have even fired them. The soldiers, reacting to what they deemed to be treachery, sent a volley into the Indian ranks. In a brief but frightful struggle, the combatants ferociously wielded rifle, knife, revolver, and war club.