The regiment was formed shortly after the outbreak of the American Civil War by order of William Gilpin, the first governor of the territory.

Recruiters began enlisting men in August 1861, just six months after the organization of the territory.

The regiment's most notable service came in the New Mexico Campaign in the spring of 1862, in which they helped repulse the advance of the Army of New Mexico under Henry Hopkins Sibley at the battles of Glorieta Pass and Peralta.

(This was done since the US War Department believed cavalry would be better in protecting the Western trails and for fighting the various Indian tribes.)

The first colonel of the regiment was John P. Slough, replaced in April 1862 by Major John Chivington, later chastised for his role as commander of the 3rd Colorado Cavalry in the November 1864 Sand Creek Massacre.