The American retreat from Fort Ticonderoga began late on July 5 after British cannons were seen on top of high ground, Mount Defiance (a.k.a. Rattlesnake Mountain and Sugar Loaf Hill) that commanded the fort. The bulk of General Arthur St. Clair's army retreated through Hubbardton to Castleton, while the rear guard, commanded by Seth Warner, stopped at Hubbardton to rest and pick up stragglers.

General Fraser, alerted to the American withdrawal early on July 6, immediately set out in pursuit, leaving a message for General John Burgoyne to send reinforcements as quickly as possible. That night Fraser camped a few miles short of Hubbardton, and the German General Friedrich Adolf Riedesel, leading reinforcements, camped a few miles further back. Rising early in the morning, Fraser reached Hubbardton, where he surprised some elements of the American rear, while other elements managed to form defensive lines. In a spirited battle, the Americans were driven back, but had almost succeeded in turning Fraser's left flank when Riedesel and his German reinforcements arrived, eventually scattering the American forces.

The battle took a large enough toll on the British forces that they did not further pursue the main American army. The many American prisoners were sent to Ticonderoga while most of the British troops made their way to Skenesboro to rejoin Burgoyne's army. Most of the scattered American remnants made their way to rejoin St. Clair's army on its way toward the Hudson River.