There is some controversy over the actual location of the battle; according to some, it took place in the town itself, while Jean-Pierre Protzen and John Hemming[1] argue that the nearby plain of Mascabamba better matches the descriptions of the encounter.

Despite this victory, the arrival of Spanish reinforcements to Cusco forced Manco Inca to abandon Ollantaytambo and seek refuge in the heavily forested region of Vilcabamba, where he established the small independent Neo-Inca State which survived until 1572.

During this stage, Atahualpa's generals were the only opposition to the Spanish advance as a sizable part of the empire's population had fought on Huascar's side during the civil war and joined Pizarro against their enemies.

[7] Meanwhile, Manco's generals occupied the central highlands of Peru and annihilated several expeditions sent to reinforce Cusco but failed in their attempt to take the recently founded Spanish capital of Lima.

[8] As a result of these events, neither side was able to break the deadlock at Cusco for several months, so the Spaniard garrison decided to make a direct attack on Manco's headquarters at the town of Ollantaytambo, 70 kilometers (43 mi) northwest of the city.

This chronicle, which includes an account of Manco Inca's rebellion and the attack on Ollantaytambo, was written in 1539 probably by Diego de Silva, a Spanish soldier who was actually in Lima during the uprising.

[18] Against the conquistadors, wooden clubs and maces with stone or bronze heads were rarely able to penetrate Spanish armor;[19] slings and other missile throwing weapons were somewhat more effective due to their accuracy and the large size of their projectiles.

[21] The attack was led by Hernando Pizarro, the senior Spanish commander in Cusco, with a force of 100 Spaniards (30 infantry, 70 cavalry) and an estimated 30,000 native allies.

[27] The main access route to Ollantaytambo runs along a narrow valley formed in the mountains by the Urubamba River, which connects the site with Machu Picchu to the west and with Pisaq and Cusco to the east.

In the event of these fortifications being overrun, the Temple Hill, a religious center surrounded by high terraces overlooking Ollantaytambo, provided a last line of defense.

In a severely compromised situation, Hernando Pizarro ordered a retreat; under the cover of darkness the Spanish force fled through the Urubamba valley with the Incas in pursuit and reached Cusco the next day.

According to Canadian explorer John Hemming, Spanish forces occupied a plain between Ollantaytambo and the Urubamba River while the main Inca army was located on a citadel (the Temple Hill) overlooking the town, protected by seventeen terraces.

Protzen thinks that these descriptions allude to a set of eleven terraces that close the plain of Mascabamba, near Ollantaytambo, which include the heavily fortified gate of T'iyupunku.

If Protzen's hypothesis is correct, the river diverted to flood the battlefield was the Urubamba, and not its smaller affluent, the Patakancha, which runs alongside the town of Ollantaytambo.

[34] With the Spaniards' position consolidated by Almagro's reinforcements, Manco Inca decided that Ollantaytambo was too close to Cusco to be tenable so he withdrew further west to the town of Vitcos.