Learning of Averell's advance upon Huntersville, Jackson concentrated his command at Mill Point. While drawing in his forces, Jackson sent a message to General Echols at Lewisburg informing him of the enemy movements and his intention to give them battle. Echols replied that he would immediately move to his support.
Jackson ordered Colonel William W. Arnett to return with the Twentieth Virginia from Marlinton, some eight miles north of Mill Point. Captain Marshall's detachment returned from Edray, while Lt. George W. Siple, commanding a company at Dunmore, was ordered to make a reconnaissance to determine the Federal strength and disposition. For some time Siple was isolated in Pocahontas County by the rapid movements of Averell's column. Colonel William P. Thompson, with the Nineteenth in Nicholas county, returned just in time to prevent the Third West Virginia Mounted from cutting off Arnett's retreat from Marlinton.
Far into the night, Jackson was busily aligning his troops and preparing for the impending struggle. He placed Arnett in command of all infantry and ordered him to station them by detachments in defensible positions along Stamping Creek. Captain Lurty's two artillery pieces were placed on a hill south of the village. The following morning Averell's advance units probed Jackson's position.
The stillness of the remote little town was rudely disrupted that morning by the small arms fire of Federal skirmishers and sharpshooters moving against Mill Point. Soon Lurty's two 12-pound howitzers opened fire upon the main force of the Federals, forcing them to withdraw to a sheltered position. For some time the confederate artillery held the Federals at bay.
Averell's advance units confronting Jackson were commanded by Colonel James N. Schoonmaker of the Fourteenth Pennsylvania. Schoonmaker was supported by the Third West Vriginia, which had rejoined him after failing to trap the Twentieth Virginia at Marlinton. The Third had moved from Huntersville over the road toward Cackleytown, when the timely arrival of the Nineteenth from Nicholas county permitted the Twentieth to escape to Mill Point. Upon the withdrawal of the Confederates from Marlinton, other units of Averell's column occupied the town.
Suspecting that reinforcements were moving to aid Schoonmaker, Jackson sent out a reconnaissance party of thirty men under Captain L. R. Exline. Driving in the Federal pickets and retrieving all of his men safely, Exline returned to report that artillery and cavalry reinforcements were joining Schoonmaker. Aware that he could not hold his position against the superior fire power and long range of the Federal artillery, Jackson prepared his troops to retreat when the batteries opened against him.
Schoonmaker was reinforced by the Eighth West Virginia and Captain C. T. Ewing's battery of the First West Virginia Light Artillery. Leaving Marlinton about dawn, these units had hastened to Schoonmaker's support when Jackson's batteries announced the battle had begun. Dismounting the cavalry, Schoonmaker dispatched Colonel Oley with his Eighth and the Fourteenth against the Confederate right. Placing the artillery on the summit of the hill to the center, he sent the Second and Third West Virginia to support the artillery and to move against the Confederate left. As Ewing's artillery opened fire, Schoonmaker ordered a general advance upon Jackson's position.
Colonel Jackson could hold his line for only a few minutes under the heavy cannon fire and musketry, and about eleven o'clock the Confederates began to withdraw. With the Nineteenth Cavalry, Colonel Thompson checked the Union charge until the infantry and artillery could escape. Sending the major party of the Nineteenth with the Confederate rearguard, Thompson remained with two officers and 30 men to hold a hill under a shower of shell and grapeshot while the infantry moved out safely.
Thompson retired slowly while delaying the Federal pursuit as much as possible. As the Federal artillery lobbed shells to burst overhead and near their ranks, the Confederates retreated under cover of hills and through timber wherever possible. The long Confederate column finally retreated the seven miles from Mill Point, through a beautiful cleared valley to Droop Mountain. The first encounter of this campaign proved to be merely a delaying action, but Jackson had a positon in mind against which Averell would find a movement more difficult.
General Averell arrived at Mill Point with two infantry regiments just as the Confederates began to retreat. Within 34 miles of his objective, Lewisburg, Averell avoided pressing the Confederates too closely, attempting to keep them as far from Lewisburg as possible. Averell's advance followed the Confederates through Hillsboro, but they were never closer than 200 yards from their rearguard.
Attempting to cut the Nineteenth Virginia from the main Confederate column, Averell sent three mounted regiments to flank the column. When the Nineteenth arrived at the base of Droop Mountain about three that afternoon, it was confronted by these mounted regiments. The isolation of the Nineteenth was prevented by some well directed shells from Lurty's battery which forced the Union regiments to withdraw.