Since June, Early and his 14,000 troops had been campaigning in the Shenandoah Valley and the surrounding area. He had been sent there by General Robert E. Lee, whose Army of Northern Virginia was pinned near Richmond, Virginia by the army of Union General Ulysses S. Grant. Early's expedition was intended to distract Grant, and he carried out his mission well. In July, Early moved down the Shenandoah Valley to the Potomac River, brushing aside two Federal forces before arriving on the outskirts of Washington, D.C. Grant dispatched troops from his army to drive Early away, but Early simply returned to the Shenandoah and continued to operate with impunity.
Now Grant sent General Philip Sheridan to deal with Early. Sheridan had been appointed on August 1 to command the Army of the Shenandoah, and he was quick to take action when he arrived on the scene. On August 10, he marched his force toward Winchester. Early was alarmed, and pulled out of the city on August 11 to a more defensible position 20 miles south of Winchester. Sheridan followed with his force, settling his troops along Cedar Creek—just north of Strasburg, Virginia.
As ordered by Grant, Sheridan stopped to await reinforcements. His army, consisting of both infantry and cavalry, would eventually total about 37,000 troops. Sheridan waited for a few days, but Confederate raider John Mosby and his Rangers burned a large store of Sheridan's supplies. Alarmed and nearly out of food, Sheridan pulled back on August 16. This retreat was reminiscent of many Union operations in Virginia during the war. Early and others thought Sheridan was as timid and uncertain as other Federal commanders. That opinion changed little in the next month as Sheridan continued to wait and gather his force.
However, Sheridan would later prove he was very different from previous Yankee leaders. In September, he began a campaign that drove the Confederates from the valley and then rendered the area useless to the Southern cause by destroying all the crops and supplies.