In mid-1777, General William Howe embarked on a plan to regain control of the Thirteen Colonies by capturing Philadelphia, the city where the Continental Congress met. He successfully captured the city in September 1777, and then, after consolidating his command of the city by repulsing an attack from General George Washington's Continental Army at Germantown in October, sought to gain control of the Delaware River as far north as the city, on which his army depended for supplies. After a Hessian assault on Fort Mercer, one of the principal defenses on the New Jersey side of the river, was repulsed in the Battle of Red Bank, Howe sent part of his army across the Delaware to Gloucester, New Jersey under the command of Lieutenant General Charles Cornwallis to take Fort Mercer. Washington reacted to this by detaching forces under Major General Nathanael Greene across the Delaware just north of Gloucester. The Battle of Gloucester was a skirmish fought early in the American Revolutionary War at Gloucester, Massachusetts on August 8 or 9, 1775. Royal Navy Captain John Linzee, commanding the sloop-of-war HMS Falcon, spotted two schooners that were returning from the West Indies. Captain Linzee spotted two American schooners making sail for Salem around 8am. Quickly capturing one of the schooners without incident, he put a crew aboard the prize before giving chase to the other.

The captain of the second schooner, apparently familiar with the area, brought his ship deep into Gloucester Harbor and grounded it near Five Pound Island shortly after noon. Linzee forced a local fisherman to pilot Falcon and the prize schooner to an anchorage in the harbor. He then sent 36 men on three small boats under the command of his lieutenant to take the ship. Among the crews sent were 10 impressed Americans, including four from Gloucester. The arrival of the British ship had caused the townspeople to raise the alarm, and militia companies began to muster, led by their captains, Joseph Foster and Bradbury Sanders. Armed with muskets and two aging swivel guns, they opened fire from the shore at the small boats as they neared the schooner. The British rowed faster, and boarded the grounded schooner, where they were effectively trapped by constant fire from the shore. The grounded ship was eventually boarded by the citizens and the remaining soldiers were taken captive. Linzee, realizing things were falling apart, sent the captured schooner to shore to retrieve the captured soldiers. Linzee, witnessing his men pinned down on the grounded schooner, ordered the captured schooner with a prize crew, including some small boats to draw near the cove. They were under command to fire upon any ‘damned rebel’ within their range.

The schooner’s native sailors mutinied against Linzee’s men, took them captive and reclaimed the ship. At this point, Linzee realized resistance was futile and he sailed off. The British loss at the Battle of Gloucester was listed as one of the reasons for an October expedition under British Captain Henry Mowat to punish Massachusetts coastal towns. Captain Mowat’s orders specifically included Gloucester as a target, but Mowat decided to forego bombarding the town because its buildings were too far apart and he didn’t think his ships’ guns would have much effect. This expedition culminated in the Burning of Falmouth, the first American town completely destroyed by the British. The burning of Falmouth led many Americans who were previously neutral or undecided to come down squarely against the British and led the Continental Congress to create the Continental Navy. Linzee's attempt to burn the town as a punishment for resisting his actions was echoed in later naval actions. In October 1775, Admiral Graves ordered Captain Henry Mowat on an expedition of reprisal against New England's coastal communities, specifically including Gloucester as a target, and citing among other justifications Captain Linzee's defeat at Gloucester.