Howe had misjudged the state of the American army. Washington still had around 11,000 men, and seeing the British distributed around the countryside decided to launch an attack on their main camp at Germantown. The town was spread out on both sides of the Schuykill River on a main road into Philadelphia. The British were camped on the southern side of the town, with pickets guarding the northern side, where four separate roads lead into their position. Washington decided to use these four roads to launch an overwhelming attack that would hit the British from all four of these roads. The American right would be the Pennsylvania militia under Major John Armstrong, advancing close to the river down the Manatawny Road. Next was the Skippack Road, where General John Sullivan would command a force of Continentals. Next was Limekiln Road, where the rest of the Continentals would advance under Nathaneal Greene. Finally, on the American left General William Smallwood commanding the Maryland and New Jersey militia would advance down the York road. If all went well the two militia columns would be able to outflank the British and attack their camp, while the main continental columns engaged the British regulars.
It was most important that Washington was able to surprise Howe. Accordingly, he stayed in camp twenty miles away from Germantown until the afternoon on 3 October. After a forced march east the American army settled into positions two miles from the British pickets at two in the morning on 4 October. Two hours later they moved again, in preparation for an attack at 5 am. As the time for the attack neared, the battlefield was smothered by a dense fog that limited visibility to fifty yards.
Washington's plan was over ambitious. Communication on the battlefield was often precarious during this period, and his plan depended on four separate columns launching simultaneous attacks. Washington was to blame the fog for the lack of coordination between his columns. The militia columns both arrived late. Armstrong on the right didn't even join the battle, while Smallwood arrived far too late, briefly engaged the British and then almost immediately retreated. The two Continental columns did attack, but their attacks were not coordinated. Sullivan's column did attack on time, but Greene had a longer march to his starting point and attacked forty five minutes late.
Despite this the battle started well for the Americans. Howe was convinced that Washington would not attack, so when Sullivan's attack went in Howe initially believed it to be a scouting party. The fog now acted to aid the Americans, hiding their true strength from Howe. It was only when the American artillery began to fire that Howe realised that he was facing a battle. Although his was the only American column yet engaged, Sullivan's men were able to push the British back, before being held up by a stone house that the British had turned into a strongpoint. This delay allowed the British to organise their defence, and Howe was able to send troops forward to face Sullivan.
Greene's column now arrived. Without the fog their arrival could have led to a British defeat, but instead his right wing fired on Sullivan's left under Wayne, thinking they were the British. A fire fight developed between the two flanks, and both suffered casualties before the mistake was discovered. Howe now took advantage of the American confusion, although whether by luck or judgement is unclear. A British counterattack hit Sullivan's disordered left wing, and met little resistance. With British forces between the two columns, the American position was now dangerously exposed. Sullivan's column was now spent, and despite Washington's personal efforts, began to collapse. Faced with this, Greene also withdrew, although 400 of his men were surrounded and captured. Sullivan's retreat was slow, but the fighting had been hard on both sides and in the fog the British were unable to mount a pursuit.
Although Germantown was a British victory, it had been a closely fought battle. The British suffered 550 casualties, compared to American losses of 152 killed, 500 wounded and 438 captured, mostly at the end of the fighting. Significantly, the American regulars had been able to hold their own against British regulars and had come close to a victory. The battle also showed that Washington was still willing to take the initiative after a series of defeats, and that the loss of Philadelphia had not weakened his determination. This was to be a key factor in convincing the French to openly support the American cause.