After their disastrous defeat at the Battle of Chickamauga, the 40,000 men of the Union Army of the Cumberland under Maj. Gen. William Rosecrans retreated to Chattanooga, Tennessee. Bragg's Army of Tennessee besieged the city, threatening to starve the Union forces into surrender. Bragg's troops established themselves on Missionary Ridge and Lookout Mountain, both of which had excellent views of the city, the Tennessee River flowing through the city, and the Union's supply lines. Lookout Mountain was actually a ridge or narrow plateau that extended 85 miles southwest from the Tennessee River, culminating in a sharp point 1,800 feet above the river. From the river the end of the mountain rose at a 45° angle and at about two thirds of the way to the summit it changed grade, forming a ledge, or "bench", 150–300 feet wide, extending for several miles around both sides of the mountain. Above the bench, the grade steepened into a 500-foot face of rock called the "palisades". Confederate artillery atop Lookout Mountain controlled access by the river, and Confederate cavalry launched raids on all supply wagons heading toward Chattanooga, which made it necessary for the Union to find another way to feed their men.
The Union government, alarmed by the potential for defeat, sent reinforcements. On October 17, Maj. Gen. Ulysses S. Grant received command of the Western armies, designated the Military Division of the Mississippi; he moved to reinforce Chattanooga and replaced Rosecrans with Maj. Gen. George H. Thomas.
Thomas launched a surprise amphibious landing at Brown's Ferry on October 27 that opened the Tennessee River by linking up Thomas's Army of the Cumberland with a relief column of 20,000 troops from the Eastern Theater's Army of the Potomac, led by Maj. Gen. Joseph Hooker. Supplies and reinforcements were thus able to flow into Chattanooga over the "Cracker Line", greatly increasing the chances for Grant's forces. In response, Bragg ordered Lt. Gen. James Longstreet to force the Federals out of Lookout Valley, directly to the west of Lookout Mountain. The ensuing Battle of Wauhatchie (October 28–29) was one of the war's few battles fought exclusively at night. The Confederates were repulsed, and the Cracker Line was secured.
On November 12, Bragg placed Maj. Gen. Carter L. Stevenson in overall command for the defense of the mountain, with Stevenson's own division positioned on the summit. The brigades of Brig. Gens. John K. Jackson, Edward C. Walthall, and John C. Moore were placed on the bench of the mountain. Jackson later wrote about the dissatisfaction of the commanders assigned to this area, "Indeed, it was agreed on all hands that the position was one extremely difficult to defense against a strong force of the enemy advancing under cover of a heavy fire." Thomas L. Connelly, historian of the Army of Tennessee, wrote that despite the imposing appearance of Lookout Mountain, "the mountain's strength was a myth. ... It was impossible to hold [the bench, which] was commanded by Federal artillery at Moccasin Bend." Although Stevenson placed an artillery battery on the crest of the mountain, the guns could not be depressed enough to reach the bench, which was accessible from numerous trails on the west side of the mountain.
Maj. Gen. William T. Sherman arrived from Vicksburg, Mississippi, with his 20,000 men of the Army of the Tennessee in mid-November. Grant, Sherman, and Thomas planned a double envelopment of Bragg's force, with the main attack by Sherman against the northern end of Missionary Ridge, supported by Thomas in the center and by Hooker, who would capture Lookout Mountain and then move across the Chattanooga Valley to Rossville, Georgia, and cut off the Confederate retreat route to the south. Grant subsequently withdrew his support for a major attack by Hooker on Lookout Mountain, intending the mass of his attack to be by Sherman.
On November 23, Sherman's force was ready to cross the Tennessee River. Grant ordered Thomas to advance halfway to Missionary Ridge on a reconnaissance in force to determine the strength of the Confederate line, hoping to ensure that Bragg would not withdraw his forces and move in the direction of Knoxville, Tennessee, where Maj. Gen. Ambrose Burnside was being threatened by a Confederate force under Longstreet. Thomas sent over 14,000 men toward a minor hill named Orchard Knob and overran the Confederate defenders.
Surprised by Thomas's move against Orchard Knob on November 23, and realizing that his center might be more vulnerable than he had thought, Bragg quickly readjusted his strategy. He recalled all units within a day's march that he had recently ordered to Knoxville. He began to reduce the strength on his left by withdrawing Maj. Gen. William H.T. Walker's division from the base of Lookout Mountain and placing them on the far right of Missionary Ridge. He assigned Hardee to command his now critical right flank, turning over the left flank to Carter Stevenson. Stevenson needed to fill the gap left by Walker's division from the mountain to Chattanooga Creek, so he sent a brigade of Jackson's brigade of Cheatham's Division and Cummings brigade of his own division into that position. (Jackson himself continued as temporary division commander on the mountain.) Stevenson deployed Walthall's brigade of 1,500 Mississippians as pickets near the base of the mountain, withholding enough for a reserve for Moore's brigade, which would defend the main line on the bench near the Cravens house.
The Union side also changed plans. Sherman had three divisions ready to cross the Tennessee, but the pontoon bridge at Brown's Ferry had torn apart and Brig. Gen. Peter J. Osterhaus's division was stranded in Lookout Valley. After receiving assurances from Sherman that he could proceed with three divisions, Grant decided to revive the previously rejected plan for an attack on Lookout Mountain and reassigned Osterhaus to Hooker's command.