The village of Manhay is a significant road junction situated in a depression of the Plateau des Tailles, leading to Bastogne, Erezée, Liège, Marche, Stavelot, and Vielsalm. This strategic position nestled among several hills is one of the German objectives of Wacht am Rein. Units of the 2nd SS-Panzerdivision enter the village on the morning of December 25, 1944.

In the afternoon of December 25, a conference takes place among various officers of units belonging to the XVIIIth Airborne Corps. Desperate for not achieving decisive results elsewhere, General Ridgway turns to his reserve corps: the 517th RCT located in Ferrières. Throughout the night of the 25th until the morning of the 26th, American aviation and artillery bombard Manhay as orders from High Command continually arrive to retake the village. Two attacks led by an infantry battalion of the 106th Infantry Division and two infantry battalions and two tank companies of the 7th Armored Division attempt to retake the town unsuccessfully between the 25th and the 26th.

The 3rd Bn. of Lt. Col. Forrest Paxton moves towards Chêne-al-Pierre-Mont-Derrieux, with the mission to retake the village of Manhay. The 3rd Battalion (minus G Company), along with the 1st platoon of the 596th Ab. Eng. Co., and a squad from the Demolition Platoon are assigned to retake Manhay, attached to the 7th Armored Division. After issuing orders, Lt. Colonel Paxton sets up his advanced PC with Colonel Graves in a ruined building near Vaux Chavanne. On December 27 at 1:00 a.m., the 3rd battalion leaves its assembly area and reaches the attack position 45 minutes later. Lt. Colonel Paxton joins them as they form up on the start line. The artillery barrage begins at 2:15 a.m., unleashing over 5,000 shells in four salvos, one directly on Manhay and three on its southern approaches.

Five minutes after the end of the artillery barrage, at 2:20 a.m., Company I under Captain Jim Birder charges forward. Lt. Colonel Paxton, fearing the Germans might have time to set up, calls for another artillery strike. The fire arrives swiftly, but tragically, a salvo lands directly on Lieutenant Floyd Stott's lead platoon, killing nine men and wounding several others. Despite this setback, Company I continues to advance with Company H behind it, firing bazookas, throwing grenades, and neutralizing any enemy movement. The Germans are stunned by the artillery and caught off guard by the rapid and violent attack. Within fifteen minutes, half of the town is cleared. By 3:30 a.m., the last pocket of resistance is eliminated. At 4:00 a.m., a small counter-attack is repulsed. Engineers clear mines and roadblocks north of Manhay, allowing reinforcements from the 7th Armored Division to consolidate the defense. By dawn, all is secure. The 3rd battalion holds its position at Manhay for the entire week. The front line is restored, and the 2nd SS Panzer Division is pushed back, but the village remains a true hell.

On December 29, three American P-38s, mistakenly believing that Manhay was still in German hands, strafe and bomb the battalion's positions, resulting in three deaths. The battalion maintains its reconnaissance and combat patrols. One night, a patrol attacks and destroys an enemy OP, significantly reducing the effectiveness of harassing fire. On January 2, 1945, the 3rd Bn. will be relieved by a battalion from the 75th Infantry Division.