The initial Allied invasion of Guadalcanal was almost immediately followed by the US naval defeat in the Battle of Savo Island, resulting in a rough parity of strength around the island; the Japanese were able to pound the Marines working on Henderson Field with cruisers, destroyers, and bombers from Rabaul, and to reinforce the Japanese forces, but Allied transports were still able to get in with more supplies too, and American carriers still lurked off to the east.
Admiral Yamamoto then planned Operation KA, with the dual goals of destroying the remaining carriers and landing more troops on Guadalcanal. The forces left Truk and Rabaul on 21 August, the same day that American intelligence reported the likelihood of such a force heading south. Chester Nimitz reacted to this by ordering Ghormley to concentrate his forces near the Solomons, and in turn Ghormley had Frank Fletcher and his three task forces TF 11 (Saratoga), TF 16 (Enterprise), and TF 18 (Wasp).
Despite spotting warning signs - Japanese aircraft and submarines - on 23 August CINCPAC intelligence decided that the Japanese were still at Truk, Fletcher was more concerned about low fuel, and sent TF 18 south to meet the oilers.
The next morning, sightings came in from all over. Ryujo and cruisers were seen by a patrol from Ndeni, and Enterprise spotted fighter and bombers from Ryujo heading towards Henderson Field. By the middle of the afternoon, much of the Japanese force had been spotted, but the sheer number of reports was confusing, and Fletcher held many of his aircraf back.
Aircraft from Enterprise made hits on Shokaku, but a group from Saratoga made the big kill of the battle, sinking Ryujo with a combination of bombs and torpedos. Unbeknownst to Fletcher, Ryujo was just a decoy, and the Japanese had spotted his carriers; when Nagumo heard that Ryujo was under attack, he launched aircraft from Shokaku and Zuikaku. Enterprise was heavily damaged by several bomb hits, and crippled temporarily.
At this point, the commanders on both sides decided not to risk further losses, and turned away from each other, ending the main action of the battle.
The Japanese transports continued to proceed down "The Slot" towards Guadalcanal, and on 25 August were attacked by Marine SBDs from Henderson, who damaged light cruiser Jintsu, forcing her to return to Truk, and sank destroyer Mutsuki. The transport force could have continued nevertheless, but was ordered to return; the troops were reloaded onto destroyers and landed on Guadalcanal at night three days later.
The Battle of the Eastern Solomons was not a decisive battle, but by turning back the Japanese, it bought the Marines on Guadalcanal a little more time. Wasp would be sunk by a submarine three weeks later, and the naval stalemate would next be tested in the Battle of Cape Esperance in October.