The Polish aim was to retake the town and break through the German encirclement before panzer reinforcements arrived and enemy resistance stiffened. After a short preparation, the battle started overnight with a Polish assault on the villages surrounding the town. The Polish forces managed to break through the positions of the enemy 44th Infantry Regiment, which was disorganized and had underestimated the Polish forces still present in the area. At one point the commander of the Polish 6th Legion's Infantry Regiment ordered the 4th squadron of the Polish 11th Uhlans Regiment to advance towards the town itself. The order was mistakenly understood as an order of a cavalry charge and the squadron, numbering 85 men at arms and commanded by Lt. Andrzej Żyliński, rushed towards the enemy positions with their sabres and rifles. In the effect of the accidental charge the Poles broke through to the town, despite suffering significant casualties (33 dead out of the 85 Uhlans who took part in the charge). The Polish infantry followed into the breach in the German defences and by the early morning the town was liberated and the German division sent in retreat.
Losses on both sides were significant. The commanding officer of 44th regiment, Maj. Krawutschke, committed suicide. In the course of the heavy fighting, the town was almost completely destroyed . Most of the substantial Jewish population of the town was deported by Germans to the Warsaw ghetto or Treblinka. After the end of World War II, the battle of Kałuszyn was one of 24 battles of the Polish Defensive War to be featured at the Tomb of Unknown Soldier in Warsaw.