The American occupation of Niagara began on May 27, 1813, and lasted until December 10th when they withdrew to Fort Niagara. Despite American promises of security for lives and property, American forces plundered and harassed town residents. As well, fighting continued as small bands of British soldiers, militia and native warriors frequently attacked American outposts and, sometimes, even penetrated into the town. On the evening of December 10th as the British forces approached the old town from Four Mile Creek, they could see the orange glow in the sky.

By the time they entered the town, as W. Hamilton Merritt recorded in his journal, Nothing but heaps of coals, and streets of furniture that the inhabitants were fortunate enough to get out of their Houses, met the Eye in all Directions. He explained that he was confident that he had the authorization from his superiors to withdraw to the American side and burn the town, thus denying the British troops any shelter during the approaching winter.

Outgunned on the lakes and suffering set backs on land, the Americans started a fleet to counter the British ships. The Americans eventually took control on all the lakes except Lake Ontario. It was on Lake Ontario that the building of massive ships reached its zenith. This floating monster was one of the most heavily armed ships in the world and the Americans scrambled to build a more powerful 130 gun ship the USS New Orleans. However, there was one major problem with launching huge ships on Lake Ontario at the end of the War of 1812 there were no canals and these great ships could not leave Lake Ontario.