The capture of confederate forts in February 1862 resulted in the need to house large numbers of prisoners of war. Prior to this, there had been a few prisoners of war in Indianapolis but under very informal arrangements. They lived in hotels, worked in the town if they needed money to support themselves and reported in once a week. After the fall of Fort Donalson, General Henry W. Halleck telegraphed Governor Morton with an inquiry regarding the number of prisoners which could be housed in Camp Morton. Governor Morton replied that Camp Morton could house 3,000 men and in five days the first group of prisoners arrived. Large groups of prisoners continued to arrive and in a week the total reached 3,700. By the end of March there were 5,000 prisoners at the camp.
When the prisoners arrived, many Indianapolis citizens crowded not only the depot and the camp, but the road to the camp. Local papers advocated a compassionate attitude toward the prisoners and reported good natured conversing between citizens and prisoners. Many of these early prisoners arrived very ill and inadequately clothed and private citizens and organizations, such as the Sanitary Commission, donated food and clothing to help the prisoners. Buildings in town such as a gymnasium and a post office were converted into hospitals. Renovations to the camp, under the direction of an Assistant Quartermaster General of the U.S. Army, Capt. James A. Ekin, included remodeling the animal stalls into barracks, construction of additional barracks and remodeling of the older buildings to increase ventilation and light.
Col. Richard Owen, 60th Indiana Regiment, assumed command of the Camp from Capt. Ben S. Nicklin in April. Operating under very general guidelines regarding the prisoners, Col. Owen developed his own set of rules and the prisoners appeared to have held him in high esteem for his treatment of them. A bronze bust of Col. Owen given to the state of Indiana by Confederate Veteran in 1911 was purchased with money raised by readers in recognition of his "courtesy and kindness." Unfortunately, at least one of Col. Owen's policies led to trouble between prisoners and guards. Prisoners were allowed to visit their hospitalized fellow inmates off the camp grounds and these visits later included stopping at local stores. One group stopped for a drink and then smuggled liquor into the camp. Drunken prisoners began to throw stones and other objects at the guards who fired upon the prisoners, injuring four of them. Owen suspended the visits out of the camp and wrote to a local paper calling attention to the low number of successful escapes from the camp as well as the conditions under which he and his men worked.
David G. Rose, U.S. Marshal for Indiana and Col. of the 54th Indiana, became the new commandant after Col. Owen was ordered into active service in June. "Three month's men" were used as temporary camp guards resulting in a constant turnover among the guards. On July 15, 1862, Capt. James Ekin, sent the following to the Hon. E.M. Stanton: "Fifty prisoners escaped last night from Camp Morton. Several have been killed and wounded. A number recaptured. We are scouring the country and hope to overtake others." It was later determined that about 25 prisoners had escaped that night, taking advantage of a storm and inexperienced guards, by forcing posts loose on the enclosure fence. All but one of the escapees were returned to the camp within a few days.
Exchanges of prisoners began at the end of August and by early September all of Camp Morton's prisoners were gone and the 5th Indiana Cavalry began to clean up the grounds. Exchanged Indiana Volunteers were housed there during the fall. At the end of October an additional 3,000 Indiana men arrived and were soon dissatisfied to the point of mutiny with life at Camp Morton. They wrote to the local papers regarding the harsh and poor condition of the camp. However, both the camp and the men were in better condition when exchange negotiations were completed on November 17. By early December, Camp Morton was deserted - but not for long.