During the Battle of Long Island on August 27, 1776, he led the original defense of the Old Stone House in Brooklyn, New York.
While watching this action from fortifications to the north on Brooklyn Heights, General Washington remarked, "Good God, what brave men must I lose this day!"
When Atlee returned home, the Pennsylvania General Assembly named him as a delegate to the Continental Congress.
In 1784, he served on the commission negotiating Indian treaties that acquired most of the remaining Native American lands in Pennsylvania.
He died on November 25, 1786, while attending a meeting of the legislature in Philadelphia, and is buried in the Christ Church Burial Ground there.