The post was named for Colonel Augustus van Horne Ellis, an American soldier killed in 1863 at the Battle of Gettysburg during the Civil War.

[2] Fort Ellis was an important post during the prominent Indian Wars of the 19th century as well as a base of operations for exploring the region now known as Yellowstone National Park.

In April 1876, Colonel John Gibbon departed Fort Ellis with 400 infantry and cavalry known as the "Montana Column" during the summer campaign of the Great Sioux War of 1876–77.

Throughout the post's history, the settlers of Bozeman utilized the federal money brought to the city by contracts and payroll, but records demonstrate criminal behavior, and intense competition for these jobs.

Since Fort Ellis was located on prime agricultural land, many settlers in Bozeman petitioned to have the post closed after the arrival of the Northern Pacific Railroad in 1883.

However, Generals Sherman and Sheridan struggled to find posts to close for fiscal reasons in the face of strong political pressure.