The location of the post was determined by the Cypress Hills Massacre in 1873, an atrocity stemming from the illegal American whiskey trade.

Walsh's original role was to shut down this trade, but in June 1876 his position grew in importance when several thousand Sioux crossed the border into Canada, taking refuge there after the Battle of Little Big Horn.

Walsh developed a strong friendship with the famous Sioux leader Sitting Bull and successfully kept peace in the region.

The Canadian government decided that Walsh's friendship with Sitting Bull was an obstacle to the Sioux's return to the United States, and in 1880 he was transferred to Fort Qu'Appelle, Saskatchewan.

In August 1897, during the height of the Klondike Gold Rush, Walsh was appointed Commissioner of the newly created Yukon Territory.