After the capture of Philadelphia on September 26, 1777, and of the failure of the American surprise attack against the British camp at the Battle of Germantown on October 4, the Americans tried to deny the British use of the city by blockading the Delaware River. To that end, two forts were constructed commanding the river. One was Fort Mercer on the New Jersey side at Red Bank (now National Park, New Jersey). The other was Fort Mifflin on Mud Island, in the Delaware River just south of the confluence of the Schuylkill River, on the Pennsylvania side opposite Fort Mercer. So long as the Americans held both forts, the British army in Philadelphia could not communicate with the outside world or be resupplied. In addition to the forts, the Americans possessed a small flotilla of Continental Navy ships on the Delaware supplemented by the Pennsylvania State Navy, all under the command of Commodore John Hazelwood.
On October 19, General Sir William Howe, the commander of the British army, evacuated his camp at Germantown and pulled his forces inside the city of Philadelphia. He sent a part of his force to capture the two American forts denying him use of the Delaware River. Earlier, Howe had sent a group of men via Webb's Ferry, at the mouth of the Schuylkill River, to marshy Providence Island (actually on the Pennsylvania mainland by Mud Island) to construct artillery batteries to bombard Fort Mifflin. The first bombardment of Fort Mifflin came on October 11. This was merely a desultory attack which convinced the British to expand and improve their batteries.
Meanwhile, 2,000 Hessian troops under the command of Colonel Karl von Donop landed at Cooper's Ferry in Gloucester City, New Jersey, about four miles (6 km) upriver from Fort Mercer, and made preparations to attack the fort, located on the high ground at Red Bank.
Von Donop, who had had three regiments defeated and captured nearly a year earlier at the Battle of Trenton, was eager to avenge what he considered to be a humiliation. He declared to his men: "Either the fort will be called Fort Donop, or I shall have fallen." Von Donop divided his force into two groups totaling 1,200 men for a two-pronged attack upon the fort on the morning of October 22. Von Donop and Hessian grenadier Lieutenant Colonel von Linsing were to attack the southern part of the fort, while Colonel Friedrich Ludwig von Minnigerode's grenadiers and Lieutenant Colonel Werner von Mirbach's infantry were to attack the northern and eastern approaches. With six British men-of-war in the river to support the attack, von Donop was convinced that the fort would be in his hands by nightfall. After a cannonade by the Hessian artillery, Linsing moved against the nine-foot-high southern parapet, and his men were cut down by devastating cannon and musket fire and were forced to retreat. On the north, Minnigerode's grenadiers managed to scale the ramparts of an abandoned section of the fort. But when they moved on they were confronted by a tangled mass of felled trees with pointed branches, a kind of abatis, protecting the main wall of the fort. With little in the way of proper tools, they were soon spotted trying to claw their way through the barricade and were fired upon by the Americans waiting for them on the other side. Suffering heavy casualties, the Hessians began to retreat, falling back to their camp ten miles (16 km) away in the village of Haddonfield whence they had come. Von Donop was wounded in the thigh during the southern attack and was left on the battlefield by his retreating troops. Mortally wounded, von Donop died three days later in the Whitall House, a farmhouse just outside the southern works of the fort between the fort and Woodbury Creek.
To make matters worse for the British and Hessians, the six British men-of-war were engaged by smaller American gunboats. During the engagement, two of the ships, the 64-gun man-of-war Augusta and the sloop of war Merlin ran aground on a shoal trying to avoid a series of underwater obstacles called chevaux-de-frise or stockades, which were rows of large wooden spears weighted down on the bottom of the river by heavy crates filled with rocks, designed to pierce the hulls of intruding British warships. The next morning, unable to drag the Merlin off the shoal and not wanting to let the ship fall into American hands, the British set fire to the ship, while the Augusta was set on fire by American batteries from Fort Mifflin. The Augusta exploded the next day.