Camp Reynolds, as it was first called, was established on June 30, 1867, by Major William Clinton and four companies of the 13th Infantry Regiment. The site on the Sun River, 24 miles west of present-day Great Falls, was chosen to guard the Mullan Road and protect mining settlements from Native American attacks. The post's name was changed to Fort Shaw on August 1, 1867, honoring the colonel who had died leading Black soldiers in the assault on Fort Wagner. The soldiers built their post around a square parade ground, constructing adobe-brick buildings that would be called 'the queen of Montana's military posts.' Life was hard - water had to be trenched from the river, fuel was scarce, and hay for horses had to be imported from the Missouri Valley. Disease was common. But mail came three times a week, and a telegraph connected the isolated garrison to the wider world.

The land around Fort Shaw was a crucible of violence in the late 1860s. After two Piegan Blackfeet were murdered in broad daylight in Fort Benton in mid-1869 - one the brother of the leader Mountain Chief - a cycle of revenge killings left about 25 white settlers dead. General Philip Sheridan ordered a punitive expedition. On the morning of January 23, 1870, Major Eugene Baker, with cavalry from Fort Ellis and infantry from Fort Shaw, attacked a Piegan camp on the Marias River. But Baker struck the wrong band. Heavy Runner, a Piegan chief who had signed a peace agreement with the United States, ran from his tent waving his treaty document. He was shot dead. More than 173 Piegan Blackfeet died that morning, including 53 women and children. The Marias Massacre shocked even many frontier Americans.

Colonel John Gibbon took command of Fort Shaw in 1870 and led its soldiers through the climactic battles of the Indian Wars. In 1876, Gibbon formed the 'Montana Column' for Sheridan's campaign against the Sioux and Northern Cheyenne. His 450-man force was supposed to rendezvous with Custer at the Little Bighorn. They arrived two days late, on June 27, to help bury the dead. The following year, Gibbon led Fort Shaw troops against the Nez Perce, who were fleeing toward Canada after refusing removal to a reservation. At the Battle of Big Hole on August 9-10, 1877, Gibbon attacked at dawn but his men were pinned down after Nez Perce sharpshooters killed 30 soldiers and captured his howitzer. The Nez Perce finally fled after losing 89 of their own, mostly women and children. Montana's last skirmishes with Native Americans came in 1878.

The Army abandoned Fort Shaw on July 1, 1891. The following year, the fort became the Fort Shaw Government Industrial Indian Boarding School. By 1898, it had 300 students from tribes across Montana, Idaho, Washington, and Wyoming. The curriculum was designed to strip away native culture and teach 'white' skills - girls learned to cook, sew, and make dairy products; boys learned farming, carpentry, and blacksmithing. But in 1902, superintendent Fred Campbell organized a girls' basketball team. The Fort Shaw girls defeated nearly every high school and college team in Montana - including several boys' teams. In 1904, Campbell sent his 11-player squad to the St. Louis World's Fair, where they lived at a Model Indian School and took on all challengers. They defeated every team they faced over five months, earning themselves the title of world champions. The school closed in 1910, but portions of the old fort survive today as a small museum run by the Sun River Valley Historical Society.