On the evening of September 18, 1862, the day after the bloody Battle of Antietam, Confederate General Robert E. Lee quietly pulled his troops from a position near the town of Sharpsburg, Maryland. The Confederates marched three miles to the rear and crossed the Potomac River into Virginia (now West Virginia) at a shallow ford near Shepherdstown. Lee planned to move his men upriver, reenter Maryland at Williamsport, and advance upon Hagerstown.

On the morning of September 19, Union troops advanced to the Potomac River to find the last of Lee's army crossing at the ford. From atop the steep bluffs of the Virginia bank of the river, Confederate artillery opened with a thundering boom. Union guns quickly went into position and returned fire. This artillery exchange marked the beginning of the two-day Battle of Shepherdstown.

Guarding the ford for the Confederate army were the artillery reserve and two infantry brigades, all under the command of Brig. Gen. William Nelson Pendleton. Throughout the morning and early afternoon of September 19, Union troops of Maj. Gen. Fitz John Porter's Fifth Corps occupied the bluffs along the Maryland bank of the river. From here, and from the dry bed of the C&O Canal, combined Federal artillery and rifle fire drove many of the Confederate gunners from their pieces. At dusk two Union regiments charged through the river and up the opposite bank, scattering the last of the Rebel defenses and capturing four cannon. That evening Pendleton incorrectly informed Lee that all 44 guns of the Confederate artillery reserve had been captured. Three divisions would be sent back to Shepherdstown to meet the threat.

Union commander George McClellan ordered a reconnaissance-in-force for the morning of September 20. After crossing at the ford, Major Charles Lovell's brigade of U.S. Regulars advanced a mile up the Charlestown Road and made contact with Confederate Gen. A.P. Hill's division, which was deployed in line of battle. Shortly after, a second Union brigade under Col. James Barnes, then crossing at the ford, was ordered to deploy along the top of the bluffs west of the Charlestown Road to cover Lovell's withdrawal.

As Lovell's men pulled back toward the river, Hill's Confederates stepped off and advanced through the open fields to their front, taking heavy casualties from Federal artillery on the Maryland bluffs. Infantry clashed along the heights overlooking the ford as Union troops conducted a treacherous withdrawal. In this brief but violent engagement, almost 700 men were killed, wounded, or captured, making this the bloodiest battle ever fought on West Virginia soil. One Union regiment, the 118th Pennsylvania, suffered a casualty rate of 36 percent.

The Battle of Shepherdstown convinced both army commanders that the Maryland Campaign was over. On the Union side, McClellan saw that an aggressive pursuit of the enemy into Virginia was not an option. The engagement at Shepherdstown forced Lee to rethink, and ultimately abort, his efforts to reenter Maryland. With the Confederate army effectively driven from Northern soil, President Abraham Lincoln used the opportunity to claim a Union victory, and on September 22, 1862, he issued the preliminary Emancipation Proclamation.