The operation was launched based on intelligence provided by Major general Nguyen Chanh Thi, the Army of the Republic of Vietnam (ARVN) I Corps commander.

III Marine Amphibious Force (III MAF) commander Lieutenant General Lewis W. Walt devised a plan to launch a pre-emptive strike against the Viet Cong (VC) 1st Regiment to nullify their threat to the vital Chu Lai Air Base and Base Area and ensure that its powerful communication tower remained intact.

Walt reminded Westmoreland that the Marines were still bound by the 6 May Letter of Instruction that restricted III MAF to reserve/reaction missions in support of South Vietnamese units heavily engaged with a VC force.

Westmoreland replied "these restraints were no longer realistic, and invited Walt to rewrite the instructions, working into them the authority he thought he needed, and promised his approval."

[5]: 69 In early July, the 1st VC Regiment had launched a second attack against the hamlet of Ba Gia, 20 miles (32 km) south of Chu Lai.

Walt flew to Chu Lai and held a hurried council of war with his senior commanders there: Brigadier general Frederick J. Karch, who had become the Chu Lai Coordinator on 5 August, Colonel McClanahan of the 4th Marines and Colonel Oscar F. Peatross, the newly arrived 7th Marines' commander.

[5]: 70 In a hectic two-day period, the III MAF, division, wing and 7th Marines staffs assembled forces and prepared plans for the attack.

Walt, who wanted a third battalion as a floating reserve, requested permission to use the Shore Landing Force (SLF) which Admiral U. S. Grant Sharp Jr. approved immediately.

As the air and artillery fires lifted, the ground forces arrived, Companies I and K, in LVTP-5s, landed across Green Beach at 06:30 and pushed inland according to plan.

Tanks and M50 Ontos rolled off the LCUs and landing craft mechanized (LCMs) and made their way forward to support the assault companies.

The VC manned firing positions on a ridgeline east and northeast of the LZ, employing mortars, machine guns, and small arms.

This area, roughly one square kilometer, was bound by the hamlets of An Thoi on the north, Nam Yen on the south and An Cuong to the east.

[5]: 77 As Company I was preparing to move from An Cuong, a UH-1E gunship from VMO-2 was shot down by VC small arms fire northeast of the hamlet.

At 11:00 Jenkins led his unit, augmented by five tanks and three Ontos, from the Hill 43 area into the open rice paddy between Nam Yen and An Cuong.

Suddenly, from positions in Nam Yen and from Hill 30, the VC opened up with small arms and machine gun fire, catching the Marine rearguard in a crossfire.

One squad moved to the northwest of Nam Yen and killed nine VC who were manning a mortar, but were driven off by small arms fire and had to withdraw to the relative security of the tanks.

[5]: 76  Five LVTP-5s and three flame tanks, the only tactical support available at the time, were briefed on the location of the company and marked the routes they were to follow on their maps.

Informed of the ambush Muir replied that he was returning Company I to the rear CP and ordered Comer to gather whatever other support they could and to rescue them as rapidly as possible.

Peatross, well aware of the vulnerable positions of both Company H and the supply column and fearing that the VC was attempting to drive a salient between the two battalions approved a rescue mission.

With the response of supporting arms, the VC fire diminished and Company I was ordered to resume its advance toward An Cuong leaving a small rear guard on Hill 30 to supervise the evacuation of the casualties.

The company entered An Cuong against little resistance, but Comer's command group were caught by intense fire from a wooded area to their right front and forced to take what cover they could in the open rice paddies.

[5]: 77 As the intensity of the battle increased, Peatross ordered a halt to the advance of the units from LZs Red and White and along the coast to prevent the overextension of his lines.

The addition of a third Marine company to the area, coupled with the weight of supporting arms fire available, evidently forced the VC 60th Battalion to break contact.

The Marines radioed the Galveston and Orleck requesting continuous illumination throughout the evening over the Nam Yen-An Cuong area.

As darkness fell, Peatross informed Walt that the VC apparently intended to defend selected positions, while not concentrating their forces.

Company I, 3/7th Marines arrived at the regimental CP at 18:00, followed shortly by Lieutenant Colonel Charles R. Bodley and his command group.

Although much of the VC resistance had disappeared, Fisher and Muir still found pockets of stiff opposition when they launched their combined attacks at 07:30.

[5]: 79 Although the cordon phase of Starlite had been completed, Walt decided to continue the operation for five more days so that the entire area could be searched systematically.

[7][8] According to Lê Duẩn, the VC suffering 50 killed in this battle[3] The ambush of the Marine supply column was reported by journalist Peter Arnett and proved an embarrassment to the Johnson administration, who wanted to retain the secrecy of the operation.

[9] Lessons learned from the battle included the knowledge that the daily allotment of 2 US gallons (7.6 L; 1.7 imp gal) of water per man was inadequate in the heat of Vietnam.