The Anglo people were also looking for land that the Indians were already on. This led to a very brutal encounter between the two groups. The massacre was a response to the theft of a white man's horse by an Indian. The party involved hid in the brush near the village at night, agreeing not to shoot until the Tolowa left their homes in the morning. At daybreak the first shot was fired, and the men, women, and children of the village were "shot down as fast as the whites could reload their guns". Some tried to escape into Lake Earl, where they were followed and shot whenever they could be spotted above the waterline. The attackers reported that 65 Indians were killed, but this tally did not include those whose bodies sank in the lake.
After the attack, the village was renamed Pay Way after Old Pay Way, one of the few Tolowa survivors of the attack.