The failure of the campaign of 1777 finished the reputation of Sir William Howe. After learning of the surrender of Burgoyne, he submitted his resignation. Sir Henry Clinton replaced him. Lord North bemoaned “this dammed war” and talked of resigning, but the King refused to let him go.

The defeat at Saratoga and the intervention of the French forced the British to re-evaluate their strategy for the war. The British were now overstretched, having to defend the home island, the West Indies, and other colonial possessions as well as carrying on the war in America. The French navy posed a major threat. Britain did not have enough ships to mount an effective blockade of French ports. French fleets could slip out and take advantage of vulnerable points in British America. The British knew that the French admiral Charles Hector, comte d'Estaing, was ready to sally out of Toulon, bound for America. Clinton at Philadelphia might find his maritime supply line cut.

The war in America would have to be weakened to reinforce other theaters. The British shifted to a southern strategy, striking at colonies closer to the sugar-rich West Indies, and believed to be teeming with loyalists. Clinton was ordered to evacuate Philadelphia. If he felt it necessary, he could abandon New York as well and fall back on Halifax. He was to detach 5,000 troops for service in the West Indies and another 3,000 for Florida.

Clinton realized that he did not have enough shipping to transport his army, its equipment, and the thousands of loyalists who feared retaliation from vengeful Patriots. He decided to march 10,000 troops across New Jersey to New York City. The rest of his army and 3,000 loyalists sailed away on Admiral Richard Howe's ships.

Clinton set off with his army on June 18. Washington followed with an army that had been reinforced to roughly the same size as Clinton's. A large baggage train slowed Clinton. His march was harassed by militia, who hovered in his vicinity and tried to obstruct his road. By June 27, Washington's army was catching up with Clinton near Monmouth Courthouse. Washington convened two councils of war to discuss a course of action. Most of his officers wanted to avoid a battle and were content to reap the benefits of the British retreat. Washington wanted to fight. Washington gave Charles Lee, recently returned to the army after a prisoner exchange, a vanguard of 5,400 men with orders to attack Clinton's rear guard on June 28.

Lee was one of those who thought a battle inadvisable. He cautiously traversed terrain cut by three ravines, all potential traps. When he made contact with the British, he did not press his attack aggressively. The probe convinced Clinton that he needed to launch a powerful riposte. He marched to the relief of his rear guard with 6,000 men, and Lee retreated back across the ravines.

Lee's men had reached a ridge beyond the last ravine when Washington arrived. Washington was unpleasantly surprised to find Lee's force retreating. He took command and organized a defensive line along the ridge. He placed Greene's division on his right and Stirling's division on his left. Wayne commanded a force in an advanced position before the center.

The British struck Stirling first. A terrific firefight ensued. Stirling's men formed a battle line under fire, and Steuben proudly recalled that they did so “with as much precision as on an ordinary parade and with the coolness and intrepidity of veteran troops.” They did not give an inch. Clinton then attacked Greene on the right. Heavy American cannon and musket fire threw the British back. Meanwhile, Wayne held his exposed position. Three times the British advanced against him. Each time they were shattered by devastating volleys at close range. On the third assault, Wayne had his men hold their fire until the British were only forty yards away. Finally, as the British marshaled a large force that outflanked both ends of his position, Wayne fell back to the main American line. The British did not follow. Washington wanted to attack, but night was falling.

While Washington's men slept on the battlefield, Clinton withdrew his army during the night and made good his retreat to New York. The Battle of Monmouth was the last major battle in the north. Both sides could claim victory. Clinton had achieved his strategic aim, while Washington's men had fought their British opponents to a standstill, displaying the steadiness and skill of professionals. The Americans casualties included sixty-nine dead, 161 wounded, and 130 missing. The British casualties were sixty-five dead, 170 wounded, and sixty-four missing. A number of men from both armies were overcome by heat. More than 570 men deserted the British army during its long march through New Jersey.