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Front Royal had turned Banks’ flank, and he reacted intelligently: he fell back. This bought some time and during that time he learned, for instance, that Jackson had more than twice as many men as the initial reports suggested. Since those reports had the 2 armies roughly even, the news meant Banks’ should continue his retreat rather than fight at a disadvantage.
On May 24, was a disastrous day for Maj. Gen. Nathaniel P. Banks. Learning that the Confederates had taken Front Royal, and were closing on Winchester, Banks ordered a hasty retreat down the Valley Pike from Strasburg. His columns were attacked at Middletown and again at Newtown by Jackson's converging forces. The Confederates took many Union prisoners and captured so many wagons and stores that they later nicknamed the Union general "Commissary Banks". Jackson pressed the pursuit for most of the night and allowed his exhausted soldiers only a few hours sleep before dawn.
Banks now deployed at Winchester to slow the Confederate pursuit. He had two brigades of infantry under Col. Dudley Donnelly and Col. George R. Gordon, a mixed brigade of cavalry under Brig. Gen. John R. Hatch, and 16 guns. Gordon's brigade was placed on the Union right on Bower's Hill with its left flank at the Valley Pike, supported by a battery of artillery. The center of the line (Camp Hill) was held by the cavalry supported by two guns. Donnelly's brigade was placed in a crescent on the left to cover the Front Royal and Millwood roads with the rest of the artillery. At earliest light the Confederate skirmish line advanced in force driving the Union pickets back to their main line of battle.
During the night, the advance of Maj. Gen. Richard S. Ewell's division (four brigades) reached Buffalo Lick. At dawn, he deployed his brigades astride the Front Royal Pike and advanced against the Union left flank. His leading regiments (in particular the 21st North Carolina) came under heavy fire from Union forces deployed behind stone fences and were repulsed. Confederate forces regrouped and brought up artillery. After about an hour, they again advanced, this time sending regiments to either side of the high ground to enfilade the Union position. Donnelly withdrew his brigade to a position closer to town with his right flank anchored on Camp Hill. Brig. Gen. Isaac R. Trimble's brigade (Confederate) then attempted a flanking movement to the right beyond the Millwood Road. This movement threatened the Union left and rear. This movement, in conjunction with Confederate maneuvers on the left beyond the Valley Pike, caused the Union line to collapse in this sector.
In conjunction with Ewell's advance on the Front Royal Pike, Jackson advanced the Stonewall Brigade on the Valley Pike at early dawn in a heavy fog. At Jackson's command, the brigade swept over a hill to the left of the pike, driving off the Union skirmishers who held it. Jackson quickly placed a section of artillery on the hill to engage Union artillery on Bower's Hill at a range of less than half a mile. Union sharpshooters along Abrams Creek began picking off the cannoneers. In response, Banks moved his artillery farther to the right to enfilade the Confederate artillery and heavily reinforced his right flank with infantry. Jackson brought up the rest of his artillery and a duel ensued with the Union guns on Bower's Hill. It now appeared that the Union forces were preparing to turn the Confederate left.
To counter this threat, Jackson deployed Maj. Gen. Richard Taylor's Louisiana brigade, reinforced by two regiments of Brig. Gen. William B. Taliaferro's brigade, to the left along Abrams Creek. Taylor marched under fire to a position overlapping the Union right and then attacked Bower's Hill. The Confederate assault swept irresistibly forward over the crest in the face of determined resistance. The Union right flank collapsed, even as the left flank was being pressured by Ewell. Union soldiers began streaming back into town.
With the collapse of both flanks, Union forces retreated through the streets of Winchester and north on the Valley Pike. Confederate pursuit was lethargic, as the troops were exhausted from the non-stop marching of the previous week. Nevertheless, many Union prisoners fell into Confederate hands. Col. Turner Ashby's cavalry was disorganized from the actions of May 24 and did not pursue until Banks had already reached the Potomac River.
First Winchester was a major victory in Jackson's 1862 Shenandoah Valley Campaign. On the tactical level, the battle displayed considerable finesse, particularly on the part of Ewell's division on the Front Royal Pike. Brig. Gen. Taylor's attack on Bower's Hill is considered a model brigade maneuver by military historians. The ultimate significance of Jackson's victory at Winchester was its strategic impact. Union plans for a convergence on Richmond were disrupted by Jackson's audacity, and thousands of Union reinforcements were diverted to the Valley and the defense of Washington, D.C.
Jackson had to be content with the prisoners he could round up on the battlefield, and the millions of dollars of supplies he captured. This earned Banks the unkind nickname of “Commissary” because he was so good a provider – to the Confederacy. The remnants of Banks’ army fell back north across the Potomac River, and Lincoln had to divert more troops away from McClellan’s army to try and salvage something of the wreck in the Shenandoah.