Montagu was tried by court-martial at New York, but acquitted of all blame, and in July 1778 he was appointed to the frigate HMS Medea, which for the next two years he commanded on the home station, cruising in the North Sea, in the Channel, or occasionally as far south as Lisbon.
In October 1780 he was moved into the frigate HMS Juno, and, after a year of similar service in the Channel, in February 1782 sailed with Sir Richard Bickerton for the East Indies.
Juno arrived at Bombay in August 1782, and on 20 June 1783 was present at the action off Cuddalore, the last between Sir Edward Hughes and the Bailli de Suffren.
Montagu returned to England in the beginning of 1785, and being then unable to obtain employment afloat he went, in October 1786, to France on a twelve-months' leave.
In October 1787 he was back in England, but had no employment till the outbreak of the revolutionary war, when at his own special request—apparently on account of the name—he was appointed to the 74-gun third-rate HMS Montagu, one of the grand fleet under Lord Howe during the campaigns of 1793 and 1794.