The uprising took place in August and September 1862 in southwestern Minnesota when the Sioux there suddenly had been made to give up half their reservation lands. Their situation was made worse by crop failures. While the government debated over whether it would make the payments it owed to Indian nations in gold or in paper currency, the Sioux were also without money. The U.S. agent at the Sioux reservation refused to give out any food to the Indians until their money arrived from Washington. The Sioux people were hungry and angry, and white observers could see there was trouble coming and warned the government. But the situation soon erupted in August when four young men having a shooting contest suddenly fired into a party of whites, killing five people. The Sioux refused to surrender the four men to the authorities, and, under the leadership of Chief Little Crow (c. 1820–1863), they raided white settlements in the Minnesota River valley. A small U.S. military force sent out against the Sioux was annihilated. Meantime, white settlers fled the region in panic.

On September 23 Minnesota sent out 1,400 men who defeated Little Crow at the Battle of Wood Lake. The raids had already claimed the lives of 490 white civilians. Thirty-three Sioux were killed in the fighting with the military. While most of the Indians who had taken up arms fled to the Dakotas, the government began to round up native men who were suspected of participating in the campaign against white settlers. More than 300 men were tried and sentenced to death, many of them on flimsy evidence. Episcopal bishop Henry Whipple (1822–1901) interceded in their behalf, making a personal plea to President Abraham Lincoln (1809–1865). The bishop was able to get 265 death sentences reduced to prison terms. But 38 Sioux men, accused of murder or rape, were hung in a public ceremony on December 26, 1862. The Sioux reservation lands were broken up, and the remaining Sioux were dispersed. Minnesota nevertheless continued to man military posts in that part of the state for years to come.

The events during and after the uprising were brutal for both sides, but many observers had seen that the treatment of the Sioux was going to lead to conflict: One missionary, after witnessing the harsh way the policy with the Indians had been carried out, wrote to Bishop Whipple, saying, “If I were an Indian I would never lay down the war club while I lived.”