Following the victory at the Battle of Trenton early in the morning of December 26, 1776, General George Washington of the Continental Army and his council of war expected a strong British counterattack. Washington and the council decided to meet this attack in Trenton and established a defensive position south of the Assunpink Creek.

Lieutenant General Charles Cornwallis led the British forces southward in the aftermath of the December 26 battle. Leaving 1,400 men under Lieutenant Colonel Charles Mawhood in Princeton, Cornwallis advanced on Trenton with about 5,000 men on January 2. His advance was significantly slowed by defensive skirmishing by American riflemen under the command of Edward Hand, and the advance guard did not reach Trenton until twilight. After assaulting the American positions three times and being repulsed each time, Cornwallis decided to wait and finish the battle the next day. Washington moved his army around Cornwallis's camp that night and attacked Mawhood at Princeton the next day. That defeat prompted the British to withdraw from most of New Jersey for the winter.