The second combat of Bilbao (27-29 August 1812) saw the French recapture the Basque capital only two weeks after it had been captured by a joint Anglo-Spanish force.
In the summer of 1812 a British naval squadron under Captain Home Popham operated along the north coast of Spain, attacking a series of isolated French posts. His most important success came at Santander (22 July-3 August 1812), where in cooperation with a series of Spanish forces, under the overall command of General Gabriel de Mendizabal, the commander of the Spanish Seventh Army, he forced the French to abandon the city. Santander soon became an important supply base, and was Wellington's main supply route during the Vitoria campaign.
Popham and Mendizabal then decided to attack Bilbao, the capital of Biscay province and the main city in the Basque country. Mendizabal led three battalions overland (including two under Juan Díaz Porlier), while Popham landed three Biscay battalions under Mariano Renovales a few miles further east, before attacking up the Bilbao River.
On 13 August the French abandoned Bilbao after their commander misjudged the strength of the Allied attack. He attempted to recapture the city on the following day, but was repulsed. This forced General Rouget, the French commander in Biscay, to call in all of his outlying garrisons, and inform Caffarelli that the province was lost unless something was done quickly.
Caffarelli responded by gathering a field army, and joining Rouget. Their combined force was only 7,000 strong, and the Spanish had received 3,000 reinforcements under Francisco de Longa, so French success was by no means assured. Caffarelli attacked on 27 August, and over the next three days slowly forced the Spanish out of the port. The Spanish force dispersed, with Porlier heading for Cantabria, Longa to the upper Ebro and Renovales further into the interior of Biscay. Renovales was caught at Dima, not far to the south, and suffered a further defeat, but the other forces escaped largely intact.
The French recapture of Bilbao took the momentum out of the Anglo-Spanish offensive in the north, but it had achieved its main aim of preventing Caffarelli from supporting Marmont in central Spain.