In an effort to control the Sioux, Cheyenne, and Crow Indians, the United States Army established Fort Custer in June of 1887, on the high point between the Bighorn and Little Bighorn Rivers near present-day Hardin, Montana. The fort was named after Lieutenant Colonel George Custer who had lost his life in the Battle of Little Bighorn the year prior. His death, along with the loss of his troops, became a rallying point for the United States to force Native peoples onto reservation lands. Fort Custer was a part of that effort.

Construction on the fort was led by Lieutenant Colonel G.P. Buell and members of the Eleventh Infantry. They, together with a number of mechanics and laborers, arrived on site via a steamer that traveled up the Bighorn. Shortly after arriving, they had erected temporary storehouses to protect supplies and began cutting logs, baking brick, and sawing lumber. The buildings, largely constructed of local cottonwood, surrounded a large parade ground, but had no walls or other fortifications. In total, the fort had quarters for ten companies, including stables for six troops of cavalry.

By the time Fort Custer was complete, most of the tension and turmoil involving the Sioux, Cheyenne, and Crow Indians had been confined to reservations. The post continued to supply troops in other conflicts, such as the Bannock War of 1878 and an uprising at the Crow Agency in 1887. With the minimized tension, the men from Fort Custer would take on another duty, that of protecting Yellowstone National Park.

When the park was established in 1872, there was really no precedent for how to manage it as the National Park Service had not yet been created. During its first decade, the park was under constant threat from those wishing to exploit its resources. Souvenir hunters, poachers, and developers were wreaking havoc on the land. With little experience, funds, or manpower, Yellowstone National Park turned to the United States Army for help. In 1886, men from Fort Custer were transferred to Yellowstone. They began what would be 32 years of military presence in the park and were successful in strengthening, posting, and enforcing regulations that protected the land, animals, and visitors.

Fort Custer officially closed on April 17, 1898. The buildings were sold and moved off-site. Today nothing remains of the fort.