The Spanish killed thousands of Atahualpa's counselors, commanders, and unarmed attendants in the great plaza of Cajamarca, and caused his armed host outside the town to flee.

Encamped along the heights of Cajamarca with a large force of nearly 80,000[10] battle-tested troops fresh from their victories in the civil war against his half-brother Huáscar, the Inca felt they had little to fear from Pizarro's tiny army, however exotic its dress and weaponry.

In an ostensible show of goodwill, Atahualpa had lured the adventurers deep into the heart of his mountain empire where any potential threat could be isolated and responded to with massive force.

[11] The town itself had been largely emptied of its two thousand inhabitants, upon the approach of the Spanish force of 180 men, guided by an Inca noble sent by Atahualpa as an envoy.

The book History Of The Conquest Of Peru, written by 19th century author William H. Prescott, recounts the dilemma in which the Spanish force found itself.

[12]: 171–172 Pizarro gathered his officers on the evening of November 15 and outlined a scheme that recalled memories of Cortés' exploits in Mexico in its audacity: he would capture the emperor from within the midst of his own armies.

Many wore gold or silver discs on their heads and the main party was preceded by a group wearing livery of chequered colors, who sang while sweeping the roadway in front of Atahualpa.

Spanish infantry were deployed to guard the entrances to a stone building in the centre of the square while men armed with arquebuses and four small cannons took up places within it.

Valverde approached the Inca, announced himself as the emissary of God and the Spanish throne, and demanded that he accept Catholicism as his faith and Charles V, the Holy Roman Emperor as his sovereign ruler.

Although Atahualpa had already determined that he had no intention of conceding to the dictates of the Spanish, according to chronicler Garcilaso de la Vega he did attempt a brusque, bemused inquiry into the details of the Spaniards' faith and their king, which quickly bogged down in poorly-translated semantics and increased the tension of all the participants.

According to Titu Cusi, Atahualpa had received "two Viracochas", Pizarro and de Soto, at a date not specified "many days" before the battle, offering them a golden cup containing ceremonial chicha.

[16]: 61–62 Titu Cusi's only mention of a Bible being presented and then tossed to the ground is restricted to the encounter which took place before the battle, an omission that has been explained as due either to its relative insignificance to the Inca or to confusion between the events of the two days.

[17][18] The main Inca force, which had retained their weapons but remained "about quarter of a league" outside Cajamarca, scattered in confusion as the survivors of those who had accompanied Atahualpa fled from the square, breaking down a fifteen-foot length of wall in the process.

However, the shock of the Spanish attack—coupled with the spiritual significance of losing the Sapa Inca and most of his commanders in one blow—apparently shattered the army's morale, throwing its ranks into terror and initiating a massive rout.