1187 saw the crusader kingdoms reach their low point. The crusaders fought amongst themselves, while at the same time Saladin was unifying large parts of the Muslim world, eventually coming to surround the crusaders. Despite this, the crusaders failed to observe their truce with Saladin, and eventually Saladin decided on war. In June 1187 he invaded Palestine. Guy of Lusignan, king of Jerusalem, was able to raise an army of almost equal size to Saladins', but it was badly led, and the crusaders suffered a decisive defeat at the battle of Hattin (4 July 1187). Guy was captured, while the most able Crusader leader, Raymond of Tripoli, died of his wounds after the battle. The aftermath of the defeat saw the effective end of all but a tiny remnant of the crusader kingdoms. With their garrisons lost, Saladin was able to capture most cities, including Tiberias, Acre and Ascalon. Only at Tyre, where a combination of strong defences, and the arrival of Conrad of Montferrat with fresh troops thwarted Saladin. From Tyre, he moved on Jerusalem, which surrendered to him on 2 October 1187. News of the loss of Jerusalem broke on a stunned Europe, where moves were soon in hand for a fresh crusade, the Third. However, for the moment those crusaders left in Palestine has to survive.
The defences of Tyre were amongst the strongest in Palestine, with land access to the city only along a narrow isthmus, heavily defended by a series of walls. After the fall of Jerusalem, Saladin returned to besiege the city with a stronger army, complete with a siege train, and combined with a fleet. However, the siege engines proved to be unequal to the task, and his fleet was destroyed in a battle with the crusaders. Saladin withdrew to besiege Krak des Chevaliers, leaving the crusaders with a safe port for reinforcements. However, the crusaders continued to squabble amongst themselves. When Guy of Lusignan, released by Saladin under oath not to take up arms, found a priest to declare the oath invalid, Conrad refused to give him control of Tyre. Luckily, Saladin concentrated on the Crusader castles in northern Syria, before in March 1189 returning to Damascus.
Reinforcements for the crusaders has been slowly arriving at Tyre. Early in 1188 two hundred Sicilian Knights had arrived, while in April 1189 an expedition from Pisa joined them. This party soon argued with Conrad, and accepted the leadership of Guy, then camped outside Tyre. Encouraged by this reinforcement, Guy decided on a desperate move to regain himself a capitol, and at the end of August marched towards Acre. The expedition should have been a total disaster. The garrison of Acre was twice the size of Guy's army, while Saladin with his main army was in the area. A combination of illness and cautious advice decided Saladin against such a move, and Guy was allowed to reach Acre, arriving on 28 August 1189.
Acre had been the favourite residence of the kings of Jerusalem, as well as the richest of the crusader cities, and was strongly defended, by the sea to the west and south and by strong land walls to the north and east. Saladin had visited the city several times since capturing it, and it was well garrisoned and supplied. Three days after arriving at the city, and despite the disparity of numbers, Guy launched a direct assault on the city, which predictably failed.
It was soon clear that Saladin had made a grave mistake in not attack Guy before he reached Acre. New parties of crusaders, motivated by the fall of Jerusalem were beginning to arrive in Palestine, and Guy's active siege of Acre attracted most of them. In early September a Danish fleet (which allowed a blockade by sea) and a Flemish and French contingent arrived, while by the end of September a German party arrived. These were all small contingents, and the main body of crusaders were not to arrive until 1191, but they were sufficient to alarm Saladin, who moved to attack Guy's camp on 15 September. Although the attack failed, contact was made with the garrison, and the two forces found themselves camped very close to each other.
Soon after this attack, Guy was strengthened by a truce of sorts with Conrad of Montferrat, who agreed to join the siege although not to obey Guy. With this reinforcement, the crusaders decided to launch an attack on Saladin's camp (4 October). Confusion within the Muslim forces nearly handed the crusaders a great victory. Saladin's nephew Taki, commander of the right wing, feinted a retreat, with the intention of luring the Templers into a foolish attack. Unluckily, he also fooled Saladin, who moved troops from the centre to help his nephew. Saladin's right and centre broke and fled, with the crusaders in pursuit. Saladin then counter attacked with his undefeated left wing, forcing the crusaders to retreat into their fortified camp, where Saladin was unwilling to follow. The battle had been a victory for Saladin, but still left the crusader siege in place.
In March 1191, the first corn ship to reach the camp outside Acre arrived. As welcome as the food was the news that Richard I of England and Philip II Augustus of France had finally arrived in the east. Philip arrived at Acre first, on 20 April 1191, but it was the arrival of Richard, eight weeks later on 8 June, that made the difference. Luck played a part in his success. Philip had spent his time building siege engines and pounding the walls, but it needed someone of Richard's military background and ability to energize the attackers. Despite a serious illness, Richard quickly became the effective leader of the crusaders, but every attempt to take the city was foiled by a counter attack from Saladin's forces. However, the newly arrived crusader fleets had regained control of the seas, and the defenders of Acre were close to surrender. A first offer of surrender on 4 July was refused, but after a failed attack by Saladin the next day, and a final battle on 11 July, another surrender offer was accepted the following day. The terms of the surrender were honourable. The most important clauses were that the 2,700 Saracens captured in Acre were to be swapped for 1,600 Christian prisoners and the true cross, captured by Saladin. Richard's reputation is blotted by his actions after the siege. When some of the named Christian prisoners were not turned over, apparently because they had not yet arrived at Acre, he took the chance to rid himself of the Saracen prisoners, and on 20 August they were massacred by the vengeful crusaders.
The recapture of Acre was of major importance for the survival of the crusader kingdoms. It reversed the trend of conquest, and marked the beginning of a new period of crusader success, as well as becoming the new capitol of the crusader kingdom. Symbolically, Acre was the last crusader possession in Palestine, finally falling in 1291, one hundred years after the end of the siege.