Departing Petersburg via train, the army arrived in the valley at the rail center of Lynchburg to reinforce John C. Breckinridge and to contest the Federals in the region.
On July 24, after returning to the Shenandoah, the Army of the Valley won its last major battle, Second Kernstown, defeating George Crook's VIII Corps.
By the end of July, fed up with Early's free rein of the valley, President Abraham Lincoln met with Ulysses S. Grant to discuss options.
In a series of sharp engagements in August through October, Sheridan repeatedly defeated the Army of the Valley and drove Early's men southward.
The Army of the Valley ceased to exist and Lee dismissed Early from the service, fearing that he could not instill enough confidence in the new recruits required to keep the fighting going.