After the British capture of Philadelphia on September 26, 1777 and 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 the Red Bank Plantation in what was then part of Deptford Township (now National Park, New Jersey). The other was Fort Mifflin on Mud Island, in the Delaware River just south of its confluence with the Schuylkill River, on the Pennsylvania side opposite Fort Mercer. So long as the Americans held both forts, British navy ships could not reach Philadelphia to resupply the army. In addition to the forts, the Americans possessed a small flotilla of Continental Navy ships on the Delaware supplemented by the Pennsylvania State Navy. The flotilla consisted of sloops, schooners, galleys, an assortment of floating batteries and fourteen old vessels laden with barrels of tar to be used as a means of defending the river.

Meanwhile, 2,000 Hessian mercenary troops under the command of Colonel Carl von Donop was sent to take Fort Mercer on the left bank (or New Jersey side) of the Delaware River just south of Philadelphia, but was decisively defeated by a far inferior force of colonial defenders. Although the British did take Fort Mercer a month later, the victory supplied a sorely-needed morale boost to the American cause, delayed British plans to consolidate gains in Philadelphia, and relieved pressure on General George Washington's army to the north of the city.