The Army of the Potomac continued its retreat toward the James River. The bulk of McClellan's army concentrated around Savage's Station on the Richmond and York River Railroad, preparing for a difficult crossing through and around White Oak Swamp. It did so without centralized direction because McClellan had personally moved south of Malvern Hill after Gaines' Mill without leaving directions for corps movements during the retreat nor naming a second in command. Clouds of black smoke filled the air as the Union troops were ordered to burn anything they could not carry. Union morale plummeted, particularly so for those wounded, who realized that they were not being evacuated from Savage's Station with the rest of the Army.

Lee devised a complex plan to pursue and destroy McClellan's army. While the divisions of Maj. Gens. James Longstreet and A.P. Hill looped back toward Richmond and then southeast to the crossroads at Glendale, and Maj. Gen. Theophilus H. Holmes's division headed farther south, to the vicinity of Malvern Hill, Brig. Gen. John B. Magruder's division was ordered to move due east along the Williamsburg Road and the York River Railroad to attack the Federal rear guard. Stonewall Jackson, commanding his own division, as well as the divisions of Maj. Gen. D.H. Hill and Brig. Gen. William H. C. Whiting, was to rebuild a bridge over the Chickahominy and head due south to Savage's Station, where he would link up with Magruder and deliver a strong blow that might cause the Union Army to turn around and fight during its retreat. Confederate Brig. Gen. John B. Magruder pursued along the railroad and the Williamsburg Road and struck Maj. Gen. Edwin Vose Sumner's II Corps (the Union rearguard) with three brigades near Savage's Station, while Maj. Gen. Thomas J. "Stonewall" Jackson's divisions were stalled north of the Chickahominy River. Union forces continued to withdraw across White Oak Swamp, abandoning supplies and more than 2,500 wounded soldiers in a field hospital.