Between April and October 1841, disaffected Afghan tribes were flocking to support resistance against the British in Bamiyan and other areas north of the Hindu Kush mountains. They were organised into an effective resistance by chiefs such as Mir Masjidi Khan and others. In September 1841, Macnaghten reduced the subsidies paid out to Ghilzai tribal chiefs in exchange for accepting Shuja as Emir and to keep the passes open, which immediately led to the Ghazis rebelling and a jihad being proclaimed. The monthly subsidies, which were effectively bribes for the Ghazi chiefs to stay loyal, was reduced from 80,000 to 40,000 rupees at a time of rampant inflation, and as the chiefs' loyalty had been entirely financial, the call of jihad proved stronger. Macnaghten did not take the threat seriously at first, writing to Henry Rawlinson in Kandahar on 7 October 1841: "The Eastern Ghilzyes are kicking up a row about some deductions which have been made from their pay. The rascals have completely succeeded in cutting communications for the time being, which is very provoking to me at this time; but they will be well trounced for their pains. One down, t'other come on, is the principle of these vagabonds".

Macnaghten ordered an expedition. On 10 October 1841, the Ghazis in a night raid defeated the Thirty-fifth Native Infantry, but were defeated the next day by the Thirteenth Light Infantry. After their defeat, which led to the rebels fleeing to the mountains, Macnaghten overplayed his hand by demanding that the chiefs who rebelled now send their children to Shuja's court as hostages to prevent another rebellion. As Shuja had a habit of mutilating people who displeased him in the slightest, Macnaghten's demand that the children of the chiefs go to the Emir's court was received with horror, which led the Ghazi chiefs to vow to fight on. Macnaghten, who had just been appointed as the governor of Bombay was torn between a desire to leave Afghanistan on a high note with the country settled and peaceful versus a desire to crush the Ghazis, which led him to temporize, at one moment threatening the harshest reprisals and the next moment, compromising by abandoning his demand for hostages. Macnaghten's alternating policy of confrontation and compromise was perceived as weakness, which encouraged the chiefs around Kabul to start rebelling. Shuja was so unpopular that many of his ministers and the Durrani clan joined the rebellion.