Once France and Spain entered the war, fighting raged around the world. The American War of Independence became part of another struggle over empire between the great European powers. Britain was forced to divert significant resources away from America. French commitments elsewhere limited the assistance that could be provided to the United States. The Spanish pursued their own interests without reference to the Americans.

War with France compelled the British to build up a fleet in home waters. Commanded by Admiral Augustus Keppel, it clashed with a French fleet commanded by Louis Guillouet, comte d'Orvilliers, near Brest on July 27, 1778. The Battle of Ushant proved to be indecisive, with both fleets blazing away at each other as they sailed past in line of battle. The next year, the French and Spanish built up a combined fleet of sixty-six ships of the line to escort an invasion force to England. An epidemic aboard the ships and contrary winds frustrated this second armada, forcing it to return to its ports. The last major naval action in northern waters occurred on August 5, 1781, when the British and Dutch fought a fierce but inconclusive battle off the Dogger Bank.

Most military operations in Europe took place in the Mediterranean. The major military objective of Spain was the recapture of Gibraltar. On June 24, 1779, a Franco-Spanish army began a siege that lasted until February 7, 1783. The British garrison successfully held out against a much larger allied force. Periodically, the British navy relieved Gibraltar, bringing supplies and reinforcements. On his way to Gibraltar, Admiral George Rodney won a victory over the Spanish at the Battle of Cape St. Vincent on January 16, 1780. The Spanish under Admiral Luis Cordova had some successes of their own, capturing two British convoys. The greatest Bourbon victory in Europe came on February 5, 1782, when the British defenders of the island of Minorca surrendered to an invading Franco-Spanish army.

On the other side of the world, fighting between the British and French raged in India. In 1779, the British attacked dependencies of Haidar Ali, ruler of Mysore, and a firm ally of the French. Haidar Ali struck back in 1780. He and his son, Tipu Sultan, won several victories against the British. The Treaty of Mangalore was a triumph for Mysore and a rare setback for the British. At sea, Admiral Pierre André de Suffren de Saint Tropez fought five battles with Sir Edward Hughes in 1782 and 1783, more than holding his own. His aggressive tactics and his capture of the anchorage of Trincomalee made him a hero.

The rich sugar islands of the West Indies were important military objectives during the war, with both sides endeavoring to protect their own while capturing those of the enemy. The French and British began the process of taking each other's islands in 1778. The French took Dominica, and the British Saint Lucia. Arriving in the West Indies late in 1778, Admiral d'Estaing skirmished with a British fleet at Saint Lucia, captured St. Vincent and Grenada, and on July 6, 1779, fought an indecisive battle off Grenada with a British fleet commanded by Admiral John Byron.

In 1780, the British launched a disastrous invasion of Nicaragua, losing more than 2,500 men, mostly to disease. Between April 17 and May 19 three battles were fought between the fleets of George Rodney and Luc Urbain de Bouexic, comte de Guichen. Admiral Guichen proved himself a master of maneuver, but otherwise the battles were inconclusive.

The year 1781 saw Admiral Rodney capture St. Eustatius and a number of other Dutch and French islands. The arrival of a French fleet under François Joseph Paul, comte de Grasse, interrupted this career of conquest before de Grasse headed off to glory at Chesapeake Bay. De Grasse returned the next year and took St. Eustatius and a string of other islands before being defeated and captured by Admiral Rodney at the Battle of the Saintes on April 12, 1782.