On November 7 1858, imperial troops attacked the Taiping army's forts on three fronts:

After heavy casualties on both sides, the Taiping army abandoned all nine forts and retreated to safety behind the city walls. On November 7 Chen Yucheng's force reached Sanhe and set up camp in Golden Ox Town, just south of Sanhe. A week later Li Xiucheng's force also reached Sanhe and camped in the region of White Stone Mountain. The Taiping army in the Sanhe region totaled more than 100,000 men and Li Xubin's staff officers suggested that the imperial force should withdraw to Tongcheng temporarily, since there were only 6,000 of them. Li Xubin refused and subsequently moved all of his forces into the newly taken forts to set up defensive positions.

Realizing the enemy had numerical superiority and he could not hold out for long, Li Xubin decided to launch a pre-emptive strike against Chen Yucheng's force. On the night of November 15 seven battalions of the imperial army were sent to attack the Taiping army at Golden Ox Town under the cover of darkness. Unbeknown to the imperial troops, however, the Taiping army had already laid an ambush for them. At dawn on November 16 the imperial army clashed head-on with the vanguard of Chen Yucheng's Taiping army, which lured the entire seven battalions of imperial troops into the ambush. Over half of the seven battalions were killed and the remainder were surrounded. Li Xubin sent out another four battalions to rescue the surrounded imperial troops and personally led several dozen charges against the Taiping army positions, but all were beaten back with heavy loss of life.

Taiping army units under Li Xiucheng's command went out to support Chen Yucheng and Wu Dinggui's forces behind the city wall also sallied forth to attack the imperial army. Li Xubin had to retreat back to the forts with the surviving imperial troops in an attempt to hold their positions and await reinforcements. However, the 15,000 men of the imperial Green Standard Army were delayed and played no part in the battle. The imperial army was severely weakened and seven out of nine forts fell in a short time; even the fort where Li Xubin's headquarters was located found itself under siege. As Li Xubin attempted a breakout, he was killed in the fierce battle (some sources claim Li hanged himself from a tree). Zeng Guofan's younger brother Zeng Guohua was also killed, and both Li and Zeng's bodies were never found. By November 18 the battle was over.

Zeng's army, too, might be described as a "national" army, because Zeng was not fighting for the interests of the Manchus. Thus, the peasants, all anti-Manchu, could choose between two sides, between the Taiping and Zeng Guofan. Although Zeng represented the gentry and was thus against the simple common people, peasants fought in masses on his side, for he paid better, and especially more regularly. Zeng, being a good strategist, won successes and gained adherents. Thus by 1856 the Taiping were pressed back on Nanjing and some of the towns round it; in 1864 Nanjing was captured.