The Suppression of Rebellion Act 1863 was passed after nine years of armed conflict that started with the Puketapu inter-tribal feud in Taranaki in 1854 and escalated to fighting between government forces and dissident tribes in Taranaki and Waikato from 1860 to 1863, and the loss of more than 1000 lives.

A report in the Hawke's Bay Herald on November 21, 1863, reported the passage of the Act as the response to rebellion by some tribes that included murders, pillaging of homesteads, and destruction of property, and noted that the ordinary course of law was inadequate to suppress the rebellion and effect punishment. The Act said:

It shall be lawful for the Governor from time to time during the continuance of the said Rebellion to issue his orders to all persons whom he shall think lit to authorize in that behalf, to take the most vigorous and effectual measures for suppressing the said Rebellion in any part of this Colony which shall appear to be necessary for the public safety, and for the safety and protection of the persons and properties of Her Majesty's peaceable and loyal Subjects, and to punish all persons acting, aiding, or in any manner assisting in the said Rebellion, or maliciously attacking or injuring the persons or properties of Her Majesty's loyal subjects in furtherance of the same, according to Martial Law. either by death, penal servitude, or otherwise, as to them shall seem expedient, and to arrest and detain in custody all persons engaged or concerned in such Rebellion or suspected thereof, und to cause all persons so arrested or detained in Custody to be brought to trial in a summary manner by Courts Martial, for all offences committed in furtherance of the said Rebellion, whether such persons shall have been taken in open arms against Her Majesty, or shall have been otherwise concerned in the said Rebellion, or in aiding, or in any manner assisting in the same, and to execute the Sentences of all Courts Martial, whether of death, penal servitude, or otherwise, and to do all other Acts necessary to such several purposes.

Armed conflict with dissident tribes continued a further nine years until February 14, 1872, when the last shots were fired at the guerrilla leader Te Kooti as he retreated into the Ureweras. The conflict claimed the lives of 2154 anti-government Maori and 745 pro-government Maori, settlers, and British soldiers. To give an idea of the financial cost of the conflict, $1-million (which is $110-million in 2014 dollars) had been budgeted for war expenditure out of the $3-million intended borrowings of the New Zealand Loan Act 1863.