The fighting took place on land and at sea around the mouth of the Penobscot and Bagaduce rivers at Castine, Maine, over a period of three weeks in July and August.

Secretary of State for the Colonies Lord George Germain and his Under-Secretary William Knox were responsible for the war effort, and they wanted to establish a base on the coast of the District of Maine that could be used to protect Nova Scotia's shipping and communities from American privateers and raiders.

[11] John Nutting was a Loyalist who had piloted Sir George Collier's expedition against Machias, and Knox induced him to write to Germain in January 1778 to promote the idea of a British military presence in Maine; he later dispatched him to London to do so in person.

Nutting described the Castine peninsula as having a harbor that "could hold the entire British Navy" and was so easily defensible that "1,000 men and two ships" could protect it against any Continental force.

[13] Germain ordered Clinton to "send such a detachment of troops at Nova Scotia, or of the provincials under your immediate command, as you shall judge proper and sufficient to defend themselves against any attempt the rebels in those parts may be able to make during the winter to take post on Penobscot River, taking with them all necessary implements for erecting a fort, together with such ordnance and stores as may be proper for its defense, and a sufficient supply of provisions.

[26] Captain Henry Mowat of the Albany was familiar with Massachusetts politics, and he took the rumors quite seriously and convinced General McLean to leave additional ships that had been part of the initial convoy.

[28] To spearhead the expedition, Massachusetts petitioned Congress for the use of three Continental Navy warships: the 12-gun sloop Providence, 14-gun brig Diligent, and 32-gun frigate Warren.

[N 1] The Massachusetts authorities mobilized more than 1,000 militia, acquired six small field cannons, and placed Brigadier General Solomon Lovell in command of the land forces.

The marines achieved their objective, but the militia turned back when British cannon overturned the leading boat, killing Major Daniel Littlefield and two of his men.

[33] On July 28, under heavy covering fire from the Tyrannicide, Hunter, and Sky Rocket, Brigadier General Peleg Wadsworth led an assault force of 400 (200 marines and 200 militia)[34] ashore before dawn at Dyce's Head on the western tip of the peninsula with orders to capture Fort George.

The British pickets, who included Lieutenant John Moore, put up a determined resistance but received no reinforcement from the fort and were forced to retire, leaving the Americans in possession of the heights.

[34] In addition his flagship, the Continental frigate Warren, suffered considerable damage during the engagement with hits to the warship's mainmast, forestay and gammoning.

[37] Although possessing significant naval superiority over the British, over the next two weeks the excessively cautious Saltonstall dawdled despite repeated requests by General Lovell that he attack Mowatt's position at the entrance to the harbor.

As long as the British warships continued to hold the harbor they were able to pin down the American forces on the ground with concentrated fire and prevent them from taking Fort George.

"[39] Saltonstall's ineptitude at Penobscot would lead to his being dismissed from the Navy as being "ever after incompetent to hold a government office or state post" the following October by the "Committee for Enquiring into the Failure of the Penobscot Expedition" of the Massachusetts General Court which determined that failure of the expedition was primarily the result of the "want of proper Spirit and Energy on the part of the Commodore", that he "discouraged any Enterprizes or offensive Measures on the part of our Fleet", and that the destruction of the fleet was occasioned "principally by the Commodore's not exerting himself at all at the time of the Retreat in opposing the Enemies' foremost Ships in pursuit".

As dawn broke, the Fort's guns opened up on the captured battery and a detachment of redcoats charged out and recaptured the Half-Moon, routing the Americans and taking 18 prisoners with them.

[45] The siege continued with minor skirmishing on August 2 with militiaman Wheeler Riggs of Falmouth being killed by an enemy cannon shot that bounced off a tree before hitting him.

[47] During this time, the British had been able to send word of their condition, and request reinforcements, and on August 3 Captain (later Vice Admiral) Sir George Collier led a fleet of ten warships out of New York.

[55] Pursuant to the terms of the 1783 Peace of Paris all British forces then evacuated Fort George (followed by some 600 Loyalists who removed from the area to St. Andrews on Passamaquoddy Bay) and abandoned their attempts to establish New Ireland.

[56] During the War of 1812, however, British forces again occupied Fort George (still calling the area New Ireland) from September 1814 to April 1815 and used it as a naval base before withdrawing again with the arrival of peace.

In 1972 the Maine Maritime Academy and the Massachusetts Institute of Technology searched for and found the wreck of Defence, a privateer that was part of the American fleet.

[citation needed] The earthworks of Fort George stand at the mouth of the Penobscot River in Castine, accompanied by concrete work added later by the Americans in the 19th century.