The Lincoln County War began in 1878 in Lincoln County, New Mexico. At the time Lincoln County was the largest county in the country, as it covered about 1/5 of the territory of New Mexico.

In the early part of the 1870's, two cattle ranchers, Lawrence Murphy and James Dolan owned the only store in the whole county, Murphy & Dolan Mercantile and Banking. Having money and controlling all of the supplies in Lincoln County, also gave them very influential ties in New Mexico and this allowed them to gain very lucrative contracts with the US Military at Fort Stanton.

Being the only store in the county allowed Murphy and Dolan to name their own prices and this enabled them to make a huge profit, much to the chagrin of the smaller ranches in the area, who were forced to pay the high prices for goods and supplies and having to accept low prices on their cattle. Murphy and Dolan controlled much of the economy and also had the county's law enforcement in their pocket. This gave the smaller ranches no recourse but to bow down to the powerful men.

In 1877, a lawyer named Alex McSween and an English cattleman and banker named John Tunstall set up a store near Murphy's place. H.H. Tunstall and company was a welcome relief to the smaller ranches and they were also backed by a large cattle rancher named John Chisum. Incensed by this, Dolan tried everything he could to get Tunstall into a gun fight but Tunstall refused to resort to violence. Instead, Tunstall hired a group of young men as cattle guards. This group of men, led by the infamous Billy the Kid, became to be known as The Regulators.

Exasperated by Tunstall and the Regulators, in February of 1878, Murphy and Dolan were able to get a court order for them to get some of Tunstall's cattle to pay for an old debt. Lincoln County sheriff William Brady formed a posse to execute the warrant and when they entered Tunstall's land, Tunstall predicated the men on his land and was then shot and killed for it. It was also believed that Brady was hired by Murphy and Dolan to kill Tunstall in any event.

This murder started the Lincoln County War and Billy the Kid took even greater offense to this murder because “John Tunstall was the only person to give Billy the Kid a break and treat him like a man.” Billy the Kid swore revenge for Tunstall's murder and over the course of the next few months, revenge was had.

The Lincoln County War officially ended in November of 1878 when President Rutherford Hayes ousted the corrupt governor of New Mexico and replaced him. Nineteen people were killed in this war including Sheriff Brady, a couple of his deputies and even Alex McSween, when his house was set on fire and was shot dead when he ran out of the burning building. Everyone in the Regulators was granted amnesty by the new governor, all except Billy the Kid. He was still wanted for the murder of Sheriff Brady and there was a five hundred dollar bounty put on his head and a man named Pat Garrett, a former friend of the outlaw, shot and killed Billy the Kid but not until July of 1881.

In pop culture, the story of the Lincoln County War was told in a movie called Chisum starring John Wayne in the title role of John Chisum.