As 1864 began, the outlook was grim for Confederate President Jefferson Davis and his generals. The encouraging victories in 1863 at Chancellorsville, Virginia, and Chickamauga, Georgia, were diminished by the repulse of General Robert E. Lee's Army of Northern Virginia at Gettysburg, Pennsylvania, and by the fall of Vicksburg, Mississippi. The signs were clear that the Confederacy had lost the strategic initiative. Davis now had to conserve Southern resources to fight a defensive war. He had to hope that either Union defeats in 1864 would bring the North to the negotiation table or that a war-weary Northern electorate would oust President Abraham Lincoln from office in November and replace him with someone willing to make peace.
On the other hand, the strategic outlook for the Union in 1864 was promising. The previous year had ended on a positive note. The Federal Army of the Potomac had fended off Lee's northern invasion and forced the rebels to retreat to central Virginia. In the Western Theater, three Federal armies coordinated by Maj. Gen. Ulysses S. Grant had won a signal victory at Chattanooga, Tennessee, in November 1863 and were pressing toward the Confederate industrial and rail center at Atlanta, Georgia. Impressed by Grant's aggressive command style and success, Lincoln brought him to Washington in early March 1864 to take command of all Federal armies. He promoted Grant to the rank of lieutenant general and named him general in chief of the U.S. Army, creating unity of command for all Union field forces.
When Grant arrived in Washington, he found Maj. Gen. George G. Meade's Army of the Potomac facing Lee's Army of Northern Virginia across the Rappahannock and Rapidan Rivers, from Fredericksburg to Culpeper, Virginia. In addition to this main area of operations was Virginia's Shenandoah Valley, a critical region for both sides west of the Blue Ridge Mountains.