During the American Revolutionary War, he led militia troops at the battles of Trenton, Princeton, Brandywine and Germantown.

In 1777, with the troops under his command in the counties of Philadelphia, Chester, and Delaware, he obtained important information for George Washington, and prevented supplies from reaching the enemy.

On 11 December, while the army under Washington was on its way to Valley Forge, after part of it had crossed the Schuylkill River at Matson's Ford, it was found that the enemy under Cornwallis were in force on the other side.

"They were met," writes Washington, "by General Potter, with part of the Pennsylvania Militia, who behaved with great bravery, and gave them every possible opposition until he was obliged to retreat from their superior numbers."

On this same day a group of Pennsylvania Militia under the command of General Potter defended the home of Thomas Wynne of Blockley from a band of British marauders.

In the spring of 1778, Washington wrote from Valley Forge: "If the state of General Potter's affairs will admit of his returning to the army, I shall be exceedingly glad to see him, as his activity and vigilance have been much wanted during the winter."

Potter eventually returned to service in late May 1778, but the role of eastern Pennsylvania in the conflict declined after the British left Philadelphia for New York in June.

James Potter died near Greencastle, Franklin County, Pennsylvania, in 1789 as the result of a construction injury during a barn raising in Penns Valley.