Since Governor Yates was unfamiliar with the land around Springfield, the state capital of Illinois, he enlisted the aid of then-State Treasurer William Butler, who along with Ozias M. Hatch, Secretary of State of Illinois, took a carriage ride with William T. Sherman to examine land about 5 and 1/2 miles northeast of downtown Springfield. An area near Riverton, Illinois (then known as "Jimtown", short for Jamestown) was selected, and named in honor of William Butler. A Union training facility was officially established there on August 2, 1861. By the war's end, over 200,000 Union troops would pass through Camp Butler.
Originally the camp was designed to train and "muster-in" Illinois troops for the Civil War. It was quickly pressed into service to house the approximately 2,000 Confederate soldiers who had been taken prisoner at the surrender of Fort Donelson, in Tennessee on February 16, 1862.
An area was set aside for the burial of Confederate prisoners of war who died at the camp. As many as 700 prisoners died in 1862 when smallpox and other diseases were rampant in the camp. The situation was aggravated by the poor living conditions the prisoners endured there, and they were interred in the cemetery in their own Confederate section. A total of 866 Confederate prisoner's graves can be found today in the National Cemetery. The Confederate graves are easily distinguishable by the pointed headstones, which were instituted under the superstition that it was a means of preventing the devil from sitting on their graves. They are buried side by side with 776 graves of Union soldiers and enlistees, making a total of 1,642 Civil War graves.