Cornwallis was not alone in launching new attacks at the start of the year. The new American commander in the south, Nathanael Greene, reached his demoralised troops at the start of December, and set about restoring the morale and quality of his army. As Cornwallis moved north, Greene moved south. Most of his army moved to Cheraw on the Pee Dee River, just inside South Carolina, while another detachment, under Daniel Morgan, was sent west to threaten the British positions in the interior of South Carolina. This move threatened the British advance, causing Cornwallis a serious problem. When Tarleton suggested that his British Legion should catch Morgan, Cornwallis agreed. Sending Tarleton west, supported by detachments of regular infantry, Cornwallis himself headed towards his meeting with Leslie.
This plan soon went badly wrong. Tarleton managed to catch Morgan at Hannah's Cowpens on 17 January 1781, but Morgan was ready for him and in the resulting battle Tarleton's unit was destroyed, with nearly 800 taken prisoner. Tarleton himself managed to escape with 40 men, but the days of his successes were largely over. Morgan himself did not linger on the battlefield. The fighting was over by ten in the morning, and Morgan and his men were on the march by noon. News reached Cornwallis on the next day, and he set out in pursuit. However, Morgan was heading north east back towards Greene, but Cornwallis expected him to march south to threaten British posts in South Carolina, and wasted day marched north west to intercept him. News of the battle and of Cornwallis' pursuit reached Greene on 25 January and he immediately realised that Cornwallis would be vulnerable on the chase, having lost much of his cavalry. He immediately set about reassembling his army, and by the end of the first week of February the two armies faced each other across a twenty five mile gap. A pursuit across North Carolina now followed. On 13 February the American forces crossed the River Dan and entered Virginia.
Cornwallis now decided to return south. It was already becoming clear that the Loyalists were not going to rise in massive numbers, while in Virginia Continent Units were being created and the rebels could only get stronger. Rather than risking destruction, Cornwallis instead headed south to Hillsboro (North Carolina). On 20 February he made another attempt to gain Loyalist support, issuing a proclamation asking for Loyalist to join him. This gained him little, but Greene believed reports that the proclamation had been a great success, and believing that North Carolina was about to change allegiance Greene decided to march south again. As he moved into North Carolina, his army gained in strength. 600 militia from Virginia, 400 Continental Infantry and 1693 militia sent for six weeks by Steuben, and 1060 militia from North Carolina joined him. Greene now outnumbered Cornwallis.
For the first two weeks of March the two armies carefully manoeuvred in the area of the Alamance Creek and Haw River. Greene's army was still growing, and finally he decided he was ready to risk a battle. On 14 March Greene moved his army to Guilford Court House, where he prepared to offer battle
The American plan was similar to that used by Daniel Morgan at the battle of Cowpens. The American army was to be deployed in three lines, the first at the edge of the open ground in the valley, the second in the woods, and the third on the high ground.
As at Cowpens, the bulk of the first line was formed by one thousand North Carolina militia spread across the road. This force was supported on the right by 200 Virginia riflemen, 110 Delaware Continental and 80 cavalry under Colonel William Washington, and on the left by 200 more Virginia riflemen and 150 men of Henry Lee's Legion, about half of whom were cavalry. At the centre of the line he placed two artillery pieces. To reach this line, the British would have to march down into the valley under fire, and then attack up hill. Just as at Cowpens, this first line was ordered to fire two volleys and then retire to the rear.
The second line, entirely in the woods, contained another 1,200 militia, this time from Virginia, located 300 yards behind the first line. Finally, another 500 to 600 yards back, the third line on the high ground at Guilford contained 800 Virginia Continentals and 600 Maryland Continentals.
Cornwallis spend the night before the battle only twelve miles from Guilford Court House. He started his troops on the twelve mile march before dawn, and at 10.00am his advance guard under Tarleton encountered American scouts from Henry Lee's troop. Despite this, the British were able to gain no idea of the American dispositions, and their first clear site of the enemy was when they reached the clear ground before the American first line.
As the British appeared, the two artillery pieces with the American first line opened fire. The British artillery returned fire while Cornwallis formed his line. The British army numbered 1,900 men in total, some of whom remained in reserve. The resulting British line was almost certainly outnumbered by the American first line alone. The British line began a staggered advance on the right, with the left wing soon following. The American commander on the left wing judged the moment to open fire perfectly, waiting until the British were only 150 yards away before firing the first volley, which tore great holes in the British line. It is a testament to the professionalism of the British troops that the line did not slow under this onslaught. Leslie, commanding on the British right ordered the pace increased. On the American right, things were going better for the British. The Americans here had fired at the same time as on the other wing, but because of the staggered start the British were out of effective range of the American guns. Here too the British advance quickened, hoping to close with the American line before the second volley.
Back on the British right, Leslie's men reached close range. At his command they stopped, fired their own volley, and then led by the Highlanders charged the American line. The Carolinian militia panicked, turned and fled, despite the best efforts of Henry Lee to hold them. On the other flank, the British reached to within 40 yards of the American line before the Americans were ready for their second volley. Both sides fired at the same time, before the British charged. Here too the militia fell back, but this time under some control.
While the militia fell back, the American supporting troops on both flanks retained their original position, allowing them to fire into the side of the British line. Lee, on the British right, forced Leslie to commit his reserves in an attempt to force him back, but all they were able to do was push Lee onto higher ground, where they were to fight an almost separate battle that lasted just as long as the main fight. On the British left, William Washington's cavalry and the Virginian riflemen also held out, forcing Lt. Colonel Webster, commanding the British left, to commit his main force to dislodging them.
These actions on the flank left the British centre exposed, and forced Cornwallis to move his reserves into the centre. The battle now entered a confused period in the woods. The American second line found itself facing the new British centre, and fought well. Despite this, the British still advanced steadily and soon came face to face with the American third line.
This third line was the strongest of the American lines. It consisted of 1400 regular troops, defending a strong hill-top position protected by broken ground. The first British troops to encounter it, from Webster's wing, appear not to have realised they were facing fresh troops and charged into the attack. The American regulars stopped them with a volley, and then ironically drove them off with a bayonet charge.
The second, more coordinated British attack met with more success. The 2nd Battalion of Guards managed to dislodge the 5th Maryland Regiment, the only inexperienced unit in the American line. William Washington's cavalry were able to plug the hole, and a vicious melee developed, which soon dragged in other British units. Although the British troops were vastly superior in more ordered melees, this chaotic scramble saw them in danger of being sucked in and destroyed by the superior American numbers.
Cornwallis now took ruthless action. He ordered two cannon to fire grapeshot into the melee, hoping to force the two sides to separate. Although this would inevitably cause losses on both sides, Cornwallis evidently felt that more experienced British troops would be able to reform quicker. This proved to be the case. The newly reformed British formations once again entered the attack, and now Greene decided to retreat. Unlike at many previous battles, the American retreat did not turn into a rout. In part this was due to the improved quality of the American soldiers, but in truth the most important element was that the British were battered.
Cornwallis had lost 532 men killed or wounded, compared to official American figures of only 263. The lower American casualty figures are perhaps not surprising, when one considers the rapid retreat of the first line and their strong defensive position at the end of the battle. Despite these casualties, the British achievement at Guilford was impressive. Outnumbered three to one and facing an enemy who had chosen their own ground and were fighting a defensive battle, Cornwallis's men were still able to force a battlefield victory. However, as happened so many times, the Americans lost the battle but won the aftermath. Cornwallis retreated to Willmington, where his badly bruised army rested while he pondered his next move. Just over one month after his victory at Guilford Court House, on 25 April, Cornwallis began his march to Virginia, and eventually to Yorktown.