Sitting Bull's band of Hunkpapa continued to attack migrating parties and forts in the late 1860s. When in 1871 the Northern Pacific Railway conducted a survey for a route across the northern plains directly through Hunkpapa lands, it encountered stiff Sioux resistance. The same railway people returned the following year accompanied by federal troops. Sitting Bull and the Hunkpapa attacked the survey party, which was forced to turn back. In 1873, the military accompaniment for the surveyors was increased again, but Sitting Bull's forces resisted the survey "most vigorously."
The Panic of 1873 forced the Northern Pacific Railway's backers (such as Jay Cooke) into bankruptcy. This halted construction of the railroad through Sioux territory. After the discovery and new wealth from gold in California, other men became interested in the potential for gold mining in the Black Hills. In 1874, Lt. Col. George Armstrong Custer led a military expedition from Fort Abraham Lincoln near Bismarck, to explore the Black Hills for gold and to determine a suitable location for a military fort in the Hills. Custer's announcement of gold in the Black Hills triggered the Black Hills Gold Rush. Tensions increased between the Sioux and European Americans' seeking to move into the Black Hills.
Although Sitting Bull did not attack Custer's expedition in 1874, the US government was increasingly pressured to open the Black Hills to mining and settlement. It was alarmed at reports of Sioux depredations (encouraged by Sitting Bull). In November 1875, the government ordered all Sioux bands outside the Great Sioux Reservation to move onto the reservation, knowing full well that not all would comply. As of February 1, 1876, the Interior Department certified as "hostile" those bands who continued to live off the reservation. This certification allowed the military to pursue Sitting Bull and Lakota bands as "hostiles".
According to the historian Margot Liberty, many Lakota bands allied with the Cheyenne during the Plains Wars because they thought the other nation was under attack by the US. Given this connection, she suggests the major war should have been called "The Great Cheyenne War". Since 1860, the Northern Cheyenne had led several battles among the Plains Indians. Before 1876, the US Army had destroyed seven Cheyenne camps, more than those of any other nation.