The Fort was created in 1877 as part of the intensive reaction to the defeat of Lieutenant Colonel George A. Custer and the 7th Cavalry Regiment at the Battle of the Little Bighorn in June, 1876, and was soon outmoded as the Plains Indian Wars came to an end.

The army surprised and scattered the Cheyennes driving men, women and children out of their village into subzero temperatures and snow on the open prairie.

[3] After considerable study a decision was made to relocate Fort McKinney 45 miles northwest, to a site on the Clear Fork of the Powder River.

The new site of Fort McKinney was on benchlands just north of the Clear Fork, and only a few miles from where the stream issues from the Big Horn Mountains.

Since the 1860s, several groups of Indians, most notably Sitting Bull's band of Sioux had lived year-round in this vast hunting preserve and never gone to the reservations in the Dakota Territory.

[3] By the end of 1878 these intensive military campaigns had driven the Sioux and Cheyenne Indian bands who had lived in the Powder River country to move onto the reservations or, in the case of Sitting Bull, to flee to Canada.

The end of active Indian war campaigns on the northern plains caused the fort to shift its role to keeping Shoshoni, Arapahoe and Crow tribes, who had reservations in the general area, from resuming intermittent strife with other groups seen as tribal enemies.

Nihill is recalled for his heroics in Arizona, and for his skill as a marksman with a rifle, which he developed and then displayed over a period of years, including a stint at Ft. McKinney in 1882 and 1883.

On April 13, 1892, troops of the 6th Cavalry at the fort received orders by telegraph from President Benjamin Harrison to intervene in Wyoming's Johnson County War.

The stockmen, acting outside the law, had hired the gunman to undertake an "invasion" of Johnson County intent on killing a list of men they believed to be cattle thieves.

The citizens had risen, armed themselves and surrounded the "invaders" and were carrying forward plans to burn them out of the ranch buildings where they had taken refuge when the cavalry arrived in the nick of time.

Lt. Charles B. Gatewood was a United States cavalry officer who had gained fame in 1886 when he took a small contingent of soldiers, scouts and interpreters and located the Apache war leader Geronimo at a remote location in Mexico, and then personally convinced Geronimo to make his final surrender to General Nelson Miles at Skeleton Canyon, Arizona on September 4, 1886.

After the events of April 1892, on May 18, 1892, cowboys from a local ranch set fire to the Post Exchange at Fort McKinney and planted a bomb in the form of gunpowder in a barracks stove.

Gatewood was responding to the fire and was injured by a bomb blast in a barracks; his left arm was shattered, rendering him too disabled to serve in the Cavalry.