His early stud career was disappointing and he had been covering half-bred mares for some time before being bought by Nowell and relocated to Underley where he had considerable success.

He started very poorly but made ground in the closing stages and finished second by half a length[4] to the favourite Emiliana, a filly owned and trained by William Chifney.

Gully, in association with Robert Ridsdale, also owned a colt named St Giles, who had shown little ability as a two-year-old, but showed improved form in early 1832.

From the time he was purchased by Gully, Margrave's odds for the Derby lengthened, while St Giles was heavily supported, leading to speculation that the result of the race being arranged to bring off a betting coup.

[11] On 7 June, having survived an objection from a Mr Wheeler who claimed that he was actually a four-year-old,[12] Margrave started at odds of 7/1 for the Derby at Epsom Downs Racecourse in a field of 22 runners.

Ridden by Jem Robinson, he was made the 8/1 fourth choice in the betting in a field of seventeen colts and fillies, his odds having lengthened in the week before the race after reports that he had injured a leg and was unlikely to take part.

In the final furlong Margrave produced a strong late challenge on the outside to overtake the leader Birdcatcher (not to be confused with the similarly named Irish horse) and won by three quarters of a length.

[15] The Sporting Magazine criticised the very slow early pace and described Margrave as a "coarse, heavy looking horse", but admitted that he won the race very easily.

[18] On the opening day of the meeting he won the Grand Duke Michael Stakes over ten furlongs, beating Lord Exeter's previously undefeated Oaks winner Galata.

[21] At the Houghton meeting four weeks later, Margrave was withdrawn from a scheduled match race against the four-year-old filly Camarine, with Gully paying a £150 forfeit.