After resting his battered army at Wilmington, North Carolina, Cornwallis headed for Virginia. He saw little prospect of success in returning to the Carolinas with the depleted forces at his disposal. Cornwallis had been disabused of the belief that large numbers of loyalists would rise up wherever royal forces showed the flag. He decided that the best way to provide support to the British forces farther south would be to conquer Virginia. With Virginia secure, Greene's forces would be cut off from further reinforcement, leaving the rebellion in the south to wither away.

Cornwallis wrote Clinton, urging him to transfer the large army holding New York City to Virginia. Clinton had no intention of doing this. His operations in Virginia had always been of secondary importance, designed to keep the Americans off balance and to relieve the pressure on the British forces in the Carolinas. He was aware of the dangers posed by the French navy. This had been demonstrated in the recent French attempt to trap Arnold.

Yet Clinton did not order Cornwallis out of Virginia. He even sent 1,500 reinforcements to further strengthen British forces in the state. He was keenly aware that Cornwallis was communicating with Lord Germain, who still believed in the bright prospects for British military success in the south. Clinton knew that his stock was falling in London, while that of the aggressive Cornwallis was rising. He responded by passively acquiescing in a Virginian campaign. He would neither end it nor give Cornwallis the resources that would guarantee success. Clinton's dithering over the next months would contribute to the disaster at Yorktown.

On May 20, Cornwallis joined Phillips at Petersburg. With the reinforcements sent from the north, Cornwallis commanded an army of 7,200 men. With this formidable force, he set out to crush Lafayette. The young Frenchman realized that his army of 3,000 Continentals and militia could not stand up to Cornwallis. He began a retreat, hoping to rendezvous with a force of Virginia Continentals raised by Steuben and 800 Pennsylvania Continentals under Anthony Wayne, who had been sent south by Washington.

Cornwallis chased Lafayette for a week. Realizing that he would not catch the American army, he turned his attention to striking at the American logistical system. A detachment led by the loyalist ranger John Simcoe destroyed an important store of supplies that had been guarded by Steuben. Simcoe tricked Steuben into abandoning the supplies by lighting a large number of fires in his camp at night, convincing the American general that he commanded a much larger force than he actually did. Tarleton raided Charlottesville, where the Virginia legislature had gathered. He rounded up several lawmakers and almost captured Thomas Jefferson, who galloped away on horseback mere minutes before British troops arrived at his Monticello estate. Tarleton's men destroyed a great quantity of American military supplies.

Lafayette linked up with Wayne on June 10. A few days later, he was joined by 600 Virginia riflemen. This brought his force up to 4,500 men. Heartened by his reinforcements, he began to move toward the British army, marching his army in several columns to confuse the enemy about his numbers. On June 26, some of Lafayette's men fought a sharp skirmish with Simcoe's Rangers.

Clinton, never happy with the Virginia campaign and worried about the possibility of a Franco-American assault on New York City, ordered Cornwallis to send him 3,000 troops. They were to be embarked at Portsmouth immediately. Cornwallis headed for the coast, dogged by Lafayette. As he prepared to cross the James, he set a trap for the Americans. While encamped at Green Spring Farm, he sent some slaves to the Americans with word that he had crossed most of his army to the other side of the river. On July 6, Lafayette sent Wayne with 500 men to attack what they thought was a rearguard. What Wayne found was the British army drawn up for battle. Bolstered by a few reinforcements from Lafayette, Wayne decided that only a bold front would save his command. He ordered his men to charge. This temporarily brought the British advance to a stop. Numbers soon told, and Wayne retreated, managing to extricate most of his men as night fell, though losing two guns. The Americans lost 133 killed and wounded, with twelve missing. The British suffered seventy-five casualties.