On 28 December 1962, US intelligence detected the presence of a radio transmitter along with a sizable force of Viet Cong (VC) soldiers, reported to number around 120, in the hamlet of Ap Tan Thoi in Dinh Tuong Province, home of the Army of the Republic of South Vietnam (ARVN) 7th Infantry Division. The South Vietnamese and their US advisers planned to attack Ap Tan Thoi from three directions to destroy the VC force by using two provincial Civil Guard battalions and elements of the 11th Infantry Regiment, ARVN 7th Infantry Division. The infantry units would be supported by artillery, M113 armored personnel carriers (APCs), and helicopters.

On the morning of 2 January 1963, unaware that their battle plans had been leaked to the enemy, the South Vietnamese Civil Guards spearheaded the attack by marching toward Ap Tan Thoi from the south. However, when they reached the hamlet of Ap Bac, southeast of Ap Tan Thoi, they were immediately pinned down by elements of the VC 261st Battalion. Shortly afterward, three companies of the 11th Infantry Regiment were committed into battle in northern Ap Tan Thoi. However, they too could not overcome the VC soldiers who had entrenched themselves in the area. Just before midday, further reinforcements were flown in from Tan Hiep. The 15 US helicopters ferrying the troops were riddled by VC gunfire, and five helicopters were lost as a result.

The ARVN 4th Mechanized Rifle Squadron was then deployed to rescue the South Vietnamese soldiers and US aircrews trapped at the southwest end of Ap Bac. However, its commander was highly reluctant to move heavy M113 APCs across the local terrain. Ultimately, their presence made little difference as the VC stood its ground and killed more than a dozen South Vietnamese M113 crew members in the process. The ARVN 8th Airborne Battalion was dropped late in the afternoon onto the battlefield. In a scene that characterized much of the day's fighting, they were pinned down and could not break the VC's line of defense. Under cover of darkness, the VC withdrew from the battlefield, winning their first major victory.