Essex had moved into Cornwall in late July with two intentions: to relieve the Parliamentarian garrison at Plymouth and to take control of the south-west from the king. He was wrong about Cornwall. Lord Robartes, the wealthy Cornish merchant and politician who had assured him the Parliamentarians would gain military support if they came west, had badly misjudged his own county. The Cornish provided no recruits, supplied no intelligence, and welcomed no foreign army into their valleys. While Essex bivouacked at Bodmin in early August, news came that Charles had defeated Sir William Waller at Cropredy Bridge on 29 June, joined his Oxford army with Prince Maurice's Royalists at Exeter, and was now marching west. Essex marched five miles south to Lostwithiel on 2 August and dug in. He placed detachments on the high ground to the north at Restormel Castle and to the east at Beacon Hill, and sent a contingent south to secure the port of Fowey - the only way out, if the Parliamentarian fleet under the Earl of Warwick could reach him in time.

Charles closed in deliberately. Aided by Cornish intelligence at every step, the Royalists cut off escape route after escape route. On 6 August the king sent a letter to Essex calling for his surrender. Essex stalled for several days and finally refused. On 11 August, Sir Richard Grenville and the Cornish Royalists entered Bodmin and pushed out Essex's rear-guard cavalry, then crossed the Respryn Bridge to join the main army. Royalist forces by this point numbered about 12,000 foot and 7,000 horse - half again as many as Essex commanded. Over the next two days, detachments were placed along the east side of the River Fowey to prevent any breakout overland. Two hundred Royalists with artillery were sent south to garrison the fort at Polruan, blocking the harbour mouth at Fowey to seaward. Word reached Essex that the relief force under Sir John Middleton had been turned back at Bridgwater in Somerset and was not coming. Essex was now surrounded on three sides by an army half again his size, and his sea exit was sealed.

At seven in the morning on 21 August 1644, Charles attacked. Grenville and the Cornish Royalists struck Restormel Castle from the north and dislodged the Parliamentarians, who fell back quickly. From the east, Charles and the Oxford army took Beacon Hill with little resistance. Prince Maurice occupied Druid Hill. Casualties for the first day were low, but by nightfall the Royalists held the high ground on the north and east of Lostwithiel. The next several days passed in skirmishing fire. On 24 August, Charles tightened the noose further by sending Lord Goring and Sir Thomas Bassett to secure the town of St Blazey to the south-west - cutting off the Parliamentarian foraging area and the small coves around the port of Par. Essex was now boxed in. Knowing he could not fight his way out, he made a final plan. The cavalry under William Balfour would attempt a breakout overland to Plymouth. The infantry would retreat south down the river valley to Fowey and meet the Parliamentarian fleet there. At three in the morning on 31 August, Balfour and 2,000 cavalry crossed the River Fowey in darkness and rode away unopposed.

The Parliamentarian infantry started their withdrawal south at first light on 31 August, looting Lostwithiel as they went. The Royalists saw the movement at seven and attacked. Grenville came in from the north, Charles and Maurice crossed the Fowey from the east, and together they took possession of Lostwithiel and pursued Essex's column down the river valley. At the narrow pass near St Veep, Philip Skippon - Essex's infantry commander - counter-attacked and pushed the Royalists back several fields, buying Essex time. The Royalist cavalry charged at eleven and recovered the ground. Fighting continued through the afternoon. About a mile north of Castle Dore, the Parliamentarian right flank began to give way. By six in the evening they had been pushed back to Castle Dore itself - an Iron Age earthwork that had now found a second military life - and were surrounded. Essex and his command staff slipped down to the shore in the dark, found a fishing boat, and fled to Plymouth. They left Skippon in command of the trapped army.

On the morning of 1 September, Skippon met with his officers. They voted to seek terms. Charles agreed quickly, anxious that Parliamentarian reinforcements might still arrive, and on 2 September the surrender was signed. About 6,000 Parliamentarian infantry became prisoners. The Royalists could not feed them, so they were stripped of their weapons and given passes to march east to friendly territory. The journey to Southampton took most of a month. The soldiers suffered the anger of the Cornish people on the road - the same anger that had denied Essex his hoped-for support coming west - and as many as 3,000 of the 6,000 died of exposure and disease before reaching Southampton. Many simply deserted on the way. Combined with the 700 estimated to have been killed or wounded in the fighting, and the 500 Royalist casualties, this made Lostwithiel one of the costliest defeats Parliament suffered. It secured the south-west of England for the king until early 1646. It also helped persuade Parliament, the following winter, that its war effort needed restructuring - the result was the Self-denying Ordinance and the formation of the New Model Army, the disciplined professional force that would eventually beat Charles at Naseby and end the war.