Following the defeat and dispersal of the rebel hosts, in July 1798 Dwyer withdrew into the Wicklow Mountains, and to his native Glen of Imaal, where he sustained a guerrilla campaign against British Crown forces.

The failure in July 1803 of the rising in Dublin planned by Anne Devlin, his cousin, and by Robert Emmet, with which he had hoped to coordinate, and the internment of virtually all his extended family, disposed "the Wicklow chief" to accept terms.

As captain under General Joseph Holt (a United Irishman from a Protestant, loyalist family) in battles at Arklow, Vinegar Hill, Ballyellis and Hacketstown.

Under Holt's leadership, he withdrew to the safety of the Wicklow Mountains in mid-July,[3] when rebels could no longer operate openly following their defeat in the disastrous midlands campaign.

Command fell to Dwyer when, following news of the defeat of the French landing force at the Ballinamuck in September 1798, Holt sought terms and surrendered in November.

Dwyer and his men began a campaign targeting local loyalists and yeomen, attacking small parties of the military and eluding any major sweeps against them.

He relied on a large and extended kin network that included the families of Anne Devlin and Hugh Vesty Byrne of Kirikee, allowing him to develop a series of dugouts, caves and safe houses.

[4] Dwyer later made contact with Robert Emmet and was apprised of plans for his revolt but was reluctant to commit his followers to march to Dublin unless the rebellion showed some initial success.

In December 1803, Dwyer finally capitulated on terms that would allow him safe passage to America but the government reneged on the agreement, holding him in Kilmainham Jail until August 1805, when they transported him to New South Wales (Australia) as an un-sentenced exile.

He was accompanied by his wife Mary and their eldest children and also by his companions, Hugh 'Vesty' Byrne and Martin Burke, along with Arthur Devlin and John Mernagh.

Bligh who regarded the Irish and many other nationalities with contempt, organised another trial for Michael Dwyer in which he was stripped of his free settler status and transported to Van Diemens Land (Tasmania) and Norfolk Island.

Michael Dwyer was later to become Chief of Police (1813–1820) at Liverpool, New South Wales but was dismissed in October for drunken conduct and mislaying important documents.

Bankrupted, he was forced to sell off most of his assets, which included a tavern called "The Harrow Inn", although this did not save him from several weeks of incarceration in the Sydney debtors' prison in May 1825.

Originally interred at Liverpool, his remains were reburied in the Devonshire Street Cemetery, Sydney, in 1878, by his grandson John Dwyer, Dean of St Mary's Cathedral.

The massive crowds attending Dwyer's burial and the subsequent unveiling of the monument testified to the unique esteem in which Irish-Australians held the former Wicklow hero.