By order of the Department of War, organization of the 1st Dakota Cavalry began in the winter of 1861, with recruiting stations established at Yankton, Vermillion, and Bon Homme.

[4][5] They first were stationed at Fort Randall under Lieutenant Colonel Pattee of the 7th Iowa Volunteer Cavalry Regiment, but detachments of the company were afterward sent to protect the settlements at Yankton, Vermillion, Sioux Falls and Brule Creek, Dakota Territory.

Governor William Jayne also called for "every able-bodied man to arms in defense of the homes of Dakota", with 399 men responding.

[8] Both companies were engaged in the protection of the Dakota frontier towns while Generals Henry H. Sibley and Alfred Sully, with regiments of infantry and cavalry from Minnesota, Iowa and Nebraska, sought out the hostile Indians throughout the territory.

On August 13–15, 1865, 24 soldiers in Company B participated in the Battle of Bone Pile Creek against Native American warriors near present-day Wright, Wyoming.