Alexander Stewart, Duke of Albany, was the younger brother of James III of Scotland. When the unpopular king was imprisoned by his own nobles at Lauder Bridge in July 1482, Albany briefly took control of the government. His grip was short-lived. Through bribery and the support of powerful nobles such as George Gordon, 2nd Earl of Huntly, James III regained his throne, and Albany was forced to flee, first in January 1483 to Dunbar and then on 9 April to England. James Douglas, 9th Earl of Douglas, was the other exile. He had rebelled against Albany's father, James II of Scotland, and had lived in England since his lands were forfeited to the crown in 1455. In English service under Edward IV, he had earned the Order of the Garter, the highest English chivalric honour.

The newly crowned Richard III of England had initially planned a full invasion of Scotland in 1484. Other matters of state intervened, and the English king instead settled for giving Albany and Douglas his permission, though not his support, to launch an invasion on their own resources. It was a calculated piece of policy. Successful rebellion in Scotland would weaken James III without committing English troops. Failed rebellion would cost England nothing. Albany and Douglas raised 500 horsemen between them, men willing to ride for hope of plunder, advancement, or simply the pay the two leaders could promise. They crossed the border in mid-July 1484, riding for Lochmaben in the Dumfriesshire valley, hoping to catch the fair-day crowds at their most vulnerable and turn the townspeople into rebels.

Lochmaben on 22 July would have been an ordinary market town transformed into a temporary city. Country people came from miles around for the annual fair, bringing livestock, produce, and goods to sell. Booths and stalls filled the streets. Children ran underfoot. Carts blocked the wynds. Into this scene rode 500 mounted men expecting either a fight or a welcome, depending on the political mood. The political mood was clear immediately. The townspeople took to arms against the invaders rather than joining them. Word went out, and the local gentry brought their own retainers to help. Five hundred cavalry can dominate an open field, but in a town packed with armed locals and confined by buildings and carts, that advantage shrinks rapidly. The rebels broke and ran.

James Douglas, 9th Earl of Douglas, was taken prisoner. After nearly thirty years of English exile, after his Order of the Garter and his life in Edward IV's court, he was caught by Scottish townspeople defending their fair day against him. He would spend the rest of his life imprisoned at Lindores Abbey in Fife, dying there four years later in 1488. Alexander Stewart, Duke of Albany, escaped the rout and fled. He retreated to France rather than England, the cause of restoring himself to Scotland now plainly hopeless. He died in Paris the following summer, killed in a tournament when a splinter from a lance struck his eye. Neither man saw Scotland again as a free agent. The fair-day rebellion died with their horses on Lochmaben's streets.

The Battle of Lochmaben Fair is a small note in the long catalogue of Scottish-English border conflict, but it is unusual in important ways. Most border engagements were decided by men-at-arms, professional soldiers, men paid to fight. This one was won by the inhabitants of a market town defending themselves against invaders led by their own former countrymen. Lochmaben sits on the southern slopes of the Dumfriesshire valley, with the lochs that gave it its name still ringing the town. It had grown up around Lochmaben Castle, the early stronghold of Robert the Bruce's family. The townspeople of 1484 fought for King James III because they preferred him to the alternatives Albany and Douglas were offering. Their decision held. The thrones of Scotland would not change again until James III died at Sauchieburn four years later.