Thomas Cochrane was one of the boldest naval commanders of his age and one of the most ruined. The Royal Navy had cast him out, so the young Republic of Chile hired him to build and lead its navy in the war against Spain. He fought, as he always had, with audacity bordering on recklessness. Reconnoitering Valdivia from his flagship O'Higgins, he saw not an impregnable fortress but an opportunity: the forts had been built to fire seaward at ships, and their gates faced inland, undefended. A force that landed south of the batteries and came at them from behind, by night, might roll them up one by one before the garrison understood what was happening.

Late on February 3, Cochrane's landing party slipped ashore below the fortifications, led in the assault by Major Jorge Beauchef, a French-born officer in Chilean service. They fell on the Aguada del Inglés, the "English Fort," and took its garrison utterly by surprise. In the panic and confusion that spread through the dark, the attackers pushed straight on, storming two more forts before the night was over. The Spanish defenders, unsure how large the assaulting force was, began to break. What had stood as one of the great strongholds of colonial America was unraveling in a few hours of close, chaotic fighting along the cliffs above the bay.

Daylight should have doomed the attackers. By the morning of February 4, the surviving Spanish defenders could see how few men actually opposed them. So Cochrane gambled again. He called his ships in toward the bay in broad daylight, their boats crewed by only skeleton hands. To the Spanish, watching from the remaining forts, it looked like a fresh wave of attackers arriving to reinforce the assault. The bluff held. The demoralized garrison evacuated the rest of the fortifications, withdrawing toward Osorno and the royalist stronghold of Chiloé. With almost no force at all, Cochrane had captured the Key to the South Sea.

The fall of Valdivia broke the last real foothold of Spanish power on the Chilean mainland. The looting that followed was thorough: weaponry, gunpowder, silver objects taken originally from the churches of Concepción, and the captured frigate Dolores, the richest prize of all, later sold in Valparaíso. The Franciscan missionaries around Valdivia, still loyal to the crown, were in time replaced by clergy aligned with the Republic. Royalist resistance lingered offshore in Chiloé until 1826, but the strategic question was settled. The harbor that Spain had spent nearly two centuries fortifying had fallen to one man's nerve in a single night.