Following the outbreak of war between the United States and Great Britain in June 1812, Sackets Harbor became the center of American naval and military activity for the upper St. Lawrence Valley and Lake Ontario. The brig Oneida, with a company of marines, was already at the harbor to suppress smuggling between northern New York and Canada. Local woodlands provided ample timber, and a large fleet was constructed at the harbor's extensive shipyard. Barracks were also built for the thousands of soldiers, sailors, and mechanics who soon arrived to provide the manpower for the invasion and conquest of Canada.

In an attempt to destroy the American shipyard, a British-Canadian force launched an attack on May 29, 1813. At that time the majority of the American forces were across Lake Ontario attacking Fort George. The remaining Americans drove off the enemy, but their narrow victory was marred by a fire that destroyed their military stores. During the remainder of the war, Sackets Harbor was an active station where naval ships were constructed and supplied. In December 1814, the Treaty of Ghent officially ended the War of 1812, and the Lake Ontario fleet was placed in storage at Shiphouse Point.

After the war, the massive earthen fortifications protecting the harbor were graded off and the battlefield reverted to farmland. Several blockhouses were converted to barns and another became an office for the commandant of the Navy Yard. 

The shipyard remained under Navy control because of the presence of an unfinished first-rate ship-of-the-line, the New Orleans. It was designed to carry a crew of 900 and was enclosed in a huge wooden ship house to protect it for future use. In 1817, the Rush-Bagot Agreement between the United States and Great Britain limited all naval forces on the Great Lakes. During the 1840s, old naval buildings were removed and new quarters were constructed for the naval commandant and sailing master (lieutenant), to meet the needs of a continuing naval presence.

The navy decided to scrap the New Orleans in 1883. The demolition of the vessel, together with improved Canadian-American relations, ended the need for a naval base in Sackets Harbor. The navy maintained the facility until 1955, although it was seldom used except for training by the state's naval militia.

The 1913 Centennial Park portion of the battlefield was recognized as early as 1866 as a special plot of land to be set aside to honor all the military personnel who had fought and died in the War of 1812. In 1878 the land was called the Old Battle Ground and was used for patriotic meetings, political rallies, church picnics, and other events.

New York State took control of the Navy Yard in 1967 and began acquiring more of the historic battlegrounds, including the most recent forty acres in 2006.