Gregory Hicks, a former diplomat in Tripoli at the time of the attack, told a House panel last month that the unit was told to stand down.
Dempsey said that was not the case.
"They weren't told to stand down. A 'stand down' means don't do anything," he said. "They were told that the mission they were asked to perform was not in Benghazi, but was at Tripoli airport."
Republicans insist that the Obama administration is guilty of a cover-up of the events despite a scathing independent report that faulted the State Department for inadequate security at the diplomatic mission. GOP lawmakers also have questioned why the military couldn't get aircraft or forces to Benghazi in time to thwart the second attack after the first incident that killed Stevens.
Sens. Ron Johnson, R-Wis., and Kelly Ayotte, R-N.H., questioned Dempsey about Hicks' testimony at a hearing on the military budget.
Dempsey explained that when the four members of Army special forces contacted their command center in Stuttgart, Germany, they were informed that Americans in Benghazi were "on their way and that they would be better used at the Tripoli airport because one of them was a medic."
He also said that "if they had gone, they would have simply passed each other in the air."
After the first word of the attack in Benghazi, a seven-member security team, including two military personnel, flew from Tripoli to Benghazi. Upon their arrival, they learned that Stevens was missing and the situation had calmed after the first attack, according to a Pentagon timeline released last year.
Meanwhile, a second team was preparing to leave on a Libyan C-130 cargo plane from Tripoli to Benghazi when Hicks said he learned from the Libyan prime minister that Stevens was dead. The Libyan military agreed to transport additional personnel as reinforcements to Benghazi on its cargo plane, but Hicks complained the special forces were told not to make the trip.
"They were told not to board the flight, so they missed it," Hicks said. Pressed on why, he said, "I guess they just didn't have the right authority from the right level."
Dempsey and former Defense Secretary Leon Panetta had told the Senate in February that the military couldn't get resources to Benghazi in time and scrambling jet fighters wasn't the right course. Dempsey told Ayotte that after he learned of Hicks' testimony last month, he checked back with officials on what orders were given.