On the evening of September 20, British forces under Major General Charles Grey led a surprise attack on Wayne's encampment near the Paoli Tavern in present-day Malvern, resulting in many American casualties.

After resting for a full day and refitting, Washington's army again crossed the Schuylkill River at Levering's Ford in present-day Manayunk on September 14 to face the British, who had moved little since Brandywine due to a shortage of wagons to carry their wounded and baggage.

[4] After the Battle of the Clouds, an ultimately aborted engagement due to bad weather on September 16, Washington withdrew to Yellow Springs and Reading Furnace in northern Chester County to replenish his ammunition.

Major John Maitland, commanding officer of the 2nd Light Infantry battalion, was given permission to advance with muskets loaded, giving his personal assurance that his men could be relied on not to fire.

Earlier, Wayne received two warnings of a possible attack and sent out mounted sentries, who spotted the British force two miles from the camp and gave the alarm.

Reaching Warren Tavern, the British forced a local blacksmith to guide them and approached the camp silently along heavily wooded roads, where they hit a sentry post.

Hearing the firing from the picket on the right, the main body of Wayne's force began moving west out of camp in a column through well-fenced fields when a disabled cannon blocked the avenue of escape for several minutes.

The incident gained notoriety partly because of accounts by supposed eyewitnesses, who claimed that the British had bayoneted or mutilated Americans as they were attempting to surrender.

Reports included the following: I with my own Eyes, see them, cut & hack some of our poor Men to pieces after they had fallen in their hands and scarcely shew the least Mercy to any...:— Lt. Col. Adam Hubley, 10th Pennsylvania Regiment[7]...more than a dozen soldiers had with fixed bayonets formed a cordon round him, and that everyone of them in sport had indulged their brutal ferocity by stabbing him in different parts of his body and limbs...a physician...examining him there was found..46 distinct bayonet wounds...:— William Hutchinson, Pennsylvania Militiaman[8]The Enemy last Night at twelve o'clock attacked...Our Men just raised from Sleep, moved disorderly — Confusion followed...The Carnage was very great...this is a bloody Month:— Col. Thomas Hartley, 1st Pennsylvania Regiment[9]The Annals of the Age Cannot Produce such another Scene of Butchery...:— Maj. Samuel Hay, 7th Pennsylvania Regiment[7]American military historian Mark M. Boatner III refuted these allegations, writing: American propagandists succeeded in whipping up anti-British sentiment with false accusations that Grey's men had refused quarter and massacred defenseless patriots who tried to surrender...The "no quarter" charge is refuted by the fact that the British took 71 prisoners.

In 1934, the Royal Berkshire Regiment, which carried on the traditions of the 49th Foot, were authorized to wear a red distinction in their head dress although, misleadingly, this was granted "to commemorate the role of the Light Company at the battle of Brandywine Creek".

[12] It stands 22.5 feet (6.9 m) tall and is inscribed on all four sides[13] and is located in a local park in Malvern that was added to the National Register of Historic Places in 1997 as the Paoli Battlefield Site and Parade Grounds.