[3] Fort McRae was first established by California Volunteers of the Union Army during the American Civil War on April 3, 1863.

It was located east of the Rio Grande on the south side of Canyon del Muerto, (now known as McRae Canyon), at an elevation of 4,423 feet (1,348 meters) in the southern Fra Cristobal Range, 3 miles northeast of Elephant Butte, in Sierra County, New Mexico.

Later settlements of Alamocita, Plaza del Rio Palomas, in 1867 and Cuchillo Negro in 1871, were added to the Fort's protection duties.

[5]: 73–74 The Volunteers during their time at Ft. McRae built a cenotaph with names of soldiers in the post cemetery, that was enclosed within a stone wall.

After a peace was made Fort McRae provided the garrison at the Apache reservation at Ojo Caliente on the upper Cañada Alamosa.