Stoneman would use troops under General Alvan Gillem and those commanded by General Stephen Burbridge—including the 5th and the 6th U.S. Colored Cavalry who had participated in the failed previous attempt to destroy the salt works at the first Battle of Saltville. Stoneman ordered Burbridge to bring his army of 4,200 men through the Cumberland Gap to join Stoneman and General Gillem at Knoxville, Tennessee where Gillem was refitting his own command into a picked force of 1,500 men. Stoneman did not reveal the objectives of the expedition to his subordinates until three days after it had departed Knoxville on December 10. On December 12, Stoneman's force flanked and forced back Confederate General Basil Duke's cavalry at Rogersville, Tennessee. The Federals defeated and scattered the Confederates the next day at Kingsport, Tennessee. There General Gillem captured 84 prisoners, including Col. Richard C. Morgan and the brigade's supply train.
On the 14th, the Union army began to push Duke's cavalry back toward Abingdon, Virginia. The next day, Stoneman and his cavalry went into camp at Glade Spring, Virginia, which was about west of Marion. On December 16, Stoneman's cavalry rode toward Marion, destroying infrastructure and public buildings along their path.
The opposing force of General Stoneman was the army of Major General John C. Breckinridge, who was the commander of the Department of Southwest Virginia. Breckinridge's command consisted of approximately 1,000 regular troops with another 500 militia reserves. Most of the army had been transferred to the Army of Northern Virginia to help in the defense of Richmond.
Breckinridge's army consisted of Colonel Henry Giltner's brigade, (which was formed from the soldiers of the 4th Kentucky Cavalry and the 10th Kentucky Cavalry); the 10th Kentucky Mounted Rifles (later renamed to the 13th Kentucky Cavalry), and the 64th Virginia Mounted Infantry. Breckinridge's army also included General Basil Duke's cavalry, General George Cosby's cavalry and Colonel Vincent Witcher and his 34th Battalion of Virginia Cavalry.
On the night of December 16, General Breckinridge and his troops moved out of Saltville, Virginia in an effort to stop Stoneman. Taking the regular troops with him, Breckinridge left Colonel Robert Preston in charge of the 500 militia men to defend the salt works. General Breckinridge sent Witcher and his men of the 34th on ahead of his main force and ordered them to harass the Union army.
At about 3 a.m. (Local Time), Breckinridge and his small army began to travel across Walkers Mountain. In the last few days before the march, 4 of rain fell, making travel difficult across the muddy roads. At 4:00 a.m. (Local Time), they reached the main road near Seven Mile Ford, Virginia where Breckinridge waited for daylight before continuing.
Around noon of December 17, 1864, Breckinridge's men mounted their horses rode toward Marion. Meanwhile, General Stoneman sent some of his Tennessee regiments to Wytheville, Virginia to destroy anything that looked valuable. Stoneman also sent two regiments of cavalry to destroy the lead mines and smelting facilities that were about ten miles (16 km) from Wytheville.
Stoneman and Burbridge continued on toward Marion where they encountered Witcher and his men. Burbridge's front regiment easily pushed back Witcher's small regiment, who stopped just so they could fire a volley into the Union cavalry. They then continued to retreat toward Marion. Witcher sent a courier to inform Breckinridge that they were coming to join them at Marion.
General Breckinridge's front regiment was the 10th Kentucky Mounted Rifles, under the command of Colonel Benjamin Caudill. Caudill's men dismounted and fired into the Union cavalry, causing several casualties. As the rest of Breckinridge's troops began to arrive on the scene, General Stoneman's men secured the high hill overlooking the river. Breckinridge observed that these hills were the best defensive positions in the area; following which he ordered the men of the 10th Kentucky Mounted Rifles to charge up the hill and drive out the Union army. The rest of Giltner's Brigade also joined in the charge, routing the Union soldiers. The result of the charge ended in Confederate favor, and the Confederates gained control of the hill.
Burbridge then began to form his men up in columns to counterattack the Rebel defenses. As soon as the men were in position, he ordered all columns to charge in unison. After the signal, the Union Army surged forward. The first Confederate volley of shots depleted the Union forces considerably. Even after the volley, the Rebel forces were still vastly outnumbered. Confederate Artillery commander Major Richard Page and his battery of four 10-pounder Parrott rifles began to fire, attempting to slow the charge. The overwhelming fire forced the Union soldiers to fall back with many casualties.
The Union officers then reorganized their men and with a yell of their own, charged again. Like the previous charge, this charge also was repelled. One more charge occurred that day. Courageously, the men formed and prepared to face the withering fire that they knew would come from the breast works in their front. For the final time that day, the Union army charged into Confederate fire with the same results as the previous charges. The Rebels had held on to their position during the first day of battle.
Breckinridge ordered his men to move forward and build new breastworks. These new defensive positions placed the two armies less than one hundred fifty yards apart. During the night, one Union officer was ordered to take positions at the covered bridge near the river. He and 75 men took up positions in and around the covered bridge. This was the only advance of that night by the Union army.
The Union army that was positioned at the covered bridge fired the first few volleys at the rebels to harass their front positions. General Burbridge attacked just as the fog lifted. To entertain themselves, soldiers from both armies began to hurl insults across the fields between them. About midmorning Burbridge decided that the light rain probably would not stop falling any time soon and had his officers prepare to commence the battle.
Both armies yet again raised their battle cries. Columns of Union men charged across the fields into the same fire they had received the day before. A combination of the colored and the white troops managed to push the 4th Kentucky Infantry and General Cosby's positions back. Cosby rallied his men and counterattacked, retaking their breastworks. The Union soldiers that had taken positions at the covered bridge the night before began to take pressure from the 4th Kentucky in their front. They realized their location was not safe one and some began to try to run back to the Union lines. As these men would attempt to retreat from their positions at the bridge, the rebels of the would pick most of them off. The remaining Union soldiers at the bridge decided to wait out the battle. Later in the day General Burbridge ordered one of his regiments to charge across the bridge on horseback to relieve the pressure on the trapped men. The regiment solely received a few casualties and then retreated.
On the far right, General Duke was being pressed hard by the heavy columns of attacking soldiers. Seeing this, Colonel Giltner sent his regiment to reinforce Duke. Before the 2nd arrived, Duke and his men counterattacked the Union line and routed it. Duke and Witcher then combined forces and charged the Union's extreme left flank. This Union colored regiment was also completely routed.