During the fall of 1789, Washington had to contend with the British refusing to evacuate their forts in the Northwest frontier and their concerted efforts to incite hostile Indian tribes to attack American settlers. The Northwest tribes under Miami chief Little Turtle allied with the British Army to resist American expansion, and killed 1,500 settlers between 1783 and 1790.

In 1790, Washington sent Brigadier General Josiah Harmar to pacify the Northwest tribes, but Little Turtle routed him twice and forced him to withdraw. The Northwestern Confederacy of tribes used guerrilla tactics and were an effective force against the sparsely manned American Army. Washington sent Major General Arthur St. Clair from Fort Washington on an expedition to restore peace in the territory in 1791. On November 4, St. Clair's forces were ambushed and soundly defeated by tribal forces with few survivors, despite Washington's warning of surprise attacks. Washington was outraged over what he viewed to be excessive Native American brutality and execution of captives, including women and children.

St. Clair resigned his commission, and Washington replaced him with the Revolutionary War hero Major General Anthony Wayne. From 1792 to 1793, Wayne instructed his troops on Native American warfare tactics and instilled discipline which was lacking under St. Clair. In August 1794, Washington sent Wayne into tribal territory with authority to drive them out by burning their villages and crops in the Maumee Valley. On August 24, the American army under Wayne's leadership defeated the Northwestern Confederacy at the Battle of Fallen Timbers, and the Treaty of Greenville in August 1795 opened up two-thirds of the Ohio Country for American settlement.