Again on the throne, Racoviță was deposed on orders from the Sultan, and recalled to Istanbul on pressures from Russia's Peter the Great; he was replaced by Nicholas Mavrocordatos.

He was ordered by the Ottomans to pass into Transylvania with Crimean Tatar assistance, where he was to help Francis II Rákóczi in his anti-Habsburg rebellion; his campaign met fierce Habsburg resistance in Bistrița, and his retreat was marked by another Habsburg invasion, as well as by the wide-scale plunder of boyar estates by the Nogais (allowed by Racoviță as payment for their participation in combat).

After the incident, he was ousted from the Moldavian throne after his rival Mavrocordatos appealed to the Sultan, was jailed and replaced with Grigore II Ghica.

In 1726, Racoviță presided the Iași trial of four Jews from the Bessarabian borough of Onițcani, who stood accused of having ritually murdered a five-year-old child on Easter.

The defendants were eventually acquitted following diplomatic protests (notably, the French ambassador to the Porte, Jean-Baptiste Louis Picon, remarked that such an accusation was no longer accepted in "civilized countries").