Word of Yorktown reached London on November 25, 1781. Lord Germain personally brought word of the disaster to the prime minister. Lord North reacted “as he would have taken a ball in the breast.” For the second time in the course of the war, an entire British army had marched into captivity. A fourth of the British manpower available in North America had been lost. The stricken prime minister could only plaintively repeat the words, “Oh God, it is all over!”

At the opening of 1782, the British still held the coastal cities of New York, Wilmington, Charleston, and Savannah. Sir Henry Clinton paid the price of holding the supreme command at the time of Yorktown. In April he was replaced by Sir Guy Carleton. The new British commander began concentrating his forces at New York City. Wilmington had been abandoned in January; Savannah was evacuated in July and Charleston in December. Neither side attempted any major operations around these cities, although there was some skirmishing by small parties. In the south, remnant bands of loyalists operating in the interior were hunted down.

The most serious fighting occurred on the frontier, where the war between the Indians and American settlers predated the revolution and would continue long afterward. In Georgia, the Creeks badly timed a decision to assist the British at Savannah. Anthony Wayne commanded the American force surrounding the city. He routed a force of Creeks, hoping to lift the siege.

As it became obvious that peace was in the offing, both sides began to relax, gradually making the transition away from belligerence. Prisoner exchanges had been rare earlier in the war. They became more and more frequent in 1782. Financial difficulties led Congress to cut the number of Continental troops from 17,000 to 11,000 in June. Rochambeau's army sailed away at the end of the year. They left for the Caribbean, where they were needed to protect France's vital sugar islands.

The most important combat in 1782 took place overseas. The issue of American independence had been settled at Yorktown, but the war could not end until the world war for empire between Britain and the Bourbon powers had been fought to a finish. The French had the satisfaction of making possible the capture of Cornwallis and his army at Yorktown. Despite this, neither the French nor the Spanish had dealt a decisive blow against British power elsewhere. For their part, the British had little prospect of victory over the allied coalition. Yet the British government could not contemplate peace while the military initiative lay wholly with its enemies.

Two British victories in 1782 changed the dynamic of the world war and made peace possible. The defeat of de Grasse's fleet at the Battle of the Saintes lifted British morale and put an end to a Franco-Spanish plan to conquer Jamaica. Following this battle, the Bourbon powers could not expect any more successes in the West Indies. Their own possessions were now threatened. The relief of Gibraltar by Admiral Howe was another major blow to the hopes of the French and Spanish. The conquest of Gibraltar had been Spain's primary war aim. Both Bourbon powers had devoted enormous resources to the epic siege.

The French and Spanish had failed to take Gibraltar. The British had lost the war in North America. With meaningful victories out of the question, there was no reason to continue the war.