The battle took place at the end of the ground campaign on Vella Lavella, as the Japanese sought to evacuate the 600-strong garrison from the island.

After their defeats around Munda on New Georgia and at sea in the Battle of Vella Gulf, the Japanese began evacuating their garrisons in the central Solomons.

[6] Troops from the US and New Zealand subsequently landed on Vella Lavella in mid-August and began clearing the coastal areas, pushing the Japanese towards the northwest shore.

On 6 October, an assortment of 20 auxiliary ships (including subchasers, barges, and other small vessels) under Captain Shigoroku Nakayama, was dispatched from Buin, on Bougainville Island, to rescue them.

A force of three older destroyer-transports—Fumizuki, Matsukaze, and Yūnagi—escorted by six modern fully combat-ready destroyers—Akigumo, Isokaze, Kazagumo, Yūgumo, Shigure, and Samidare—was dispatched from Rabaul under Captain Matsuji Ijuin to cover the evacuation.

In response, US Admiral Theodore Stark Wilkinson, commanding the US amphibious forces assigned to the New Georgia campaign, hurriedly rerouted two groups of three destroyers each to attempt to disrupt the evacuation.

[10] A second division of three US destroyers—Ralph Talbot, Taylor, and La Vallette—under Captain Harold O. Larson, had been detached from convoy duty further south in the Solomons with orders to join up with Walker.

[11] A tactical error by the Japanese commander resulted in his force losing the initial advantage and placing them at close range along the US ships' line of fire.

[2][15] The Japanese completed their evacuation mission, with Nakayama's force entering Marquana Bay around 01:10 while American attention was focused on the recovery and departing two hours later, withdrawing 589 troops to Buin.