This riot, which has passed into Wellington legend as “the Battle of Manners Street”, took place on the evening of Saturday, 3 April 1943. It began at the Allied Services' Club in Manners Street (now the Manners Street Post Office) when, it is alleged, servicemen from the southern United States refused to let some Maori servicemen drink in the club. When the Americans removed their Army service belts to emphasise their point of view, New Zealand servicemen joined in and the “battle” spread into the streets. American military police, who arrived to restore order, took sides and used their batons. The fighting spread to the A.N.A. Club in Willis Street, where belts and knives were used, and into Cuba Street. It has been estimated that over 1,000 American and New Zealand, troops were involved, as well as several hundreds of civilians. The battle lasted for about four hours before order was restored by the civil police. Many American soldiers were injured during this affray and at least two were killed. The “Battle of Manners Street” was the ugliest riot in New Zealand's history.

The “Battle of Manners Street” was not the only clash between American and New Zealand troops in New Zealand cities. About the same time there were two similar riots in Auckland, and a further clash occurred outside the Mayfair Cabaret, in Cuba Street, Wellington, on 12 May 1945. There was also a clash between a small party of American servicemen and Maori civilians at Otaki in October 1943.

In no case has the result of any of the ensuing inquiries been published; and, owing to the strictures of wartime censorship, no reference to the riots appeared at the time in local newspapers.