Next day the fighting began. The wind had shifted to the north-west, a good enough wind for working up Channel on the port tack. English contemporary accounts say the Armada was formed in a half-moon, a centre and two wings slightly thrown forward. Howard had as yet only brought part of his fleet out of Plymouth, but though greatly outnumbered by the Spaniards, he had his best ships and his most enterprising captains with him, and nothing daunted by the grand array of the Armada, he began a series of harassing attacks upon it.

It was Sunday morning, 31 July, according to the Spanish reckoning, the 21st according to the Old Style still used in England. It was a sunny day, with just enough wind to help the nimble, seaworthy English ships in their guerilla tactics. Howard's policy was to take full advantage of the three factors that were on his side in the solution of the problem, better seamanship in his crews, better gunnery, and handier ships. To close with and grapple in the fashion of earlier naval battles would have been to risk being crushed by superior numbers. His policy was to hang upon the flank or rear of the Armada, close in and try to cripple one or more ships by artillery fire, slip away if the enemy turned upon him, come on again as they gave up the attempt to close, and he was ready all the time to swoop down upon and capture any ship that might be detached from her consorts. At the time arm-chair critics on shore found fault with what they considered the half-hearted conduct of the admiral, and the Queen's Council inquired why it was that none of the Spanish ships had been boarded. Sir Walter Raleigh, who, as Professor Laughton notes, "must have often talked with Howard, and Drake, and Hawkins, while the business was fresh in their memories," thus explains and defends the admiral's conduct:—[10]

"Certainly, he that will happily perform a fight at sea must believe that there is more belonging to a good man of war upon the waters than great daring, and must know that there is a great deal of difference between fighting loose or at large and grappling. To clap ships together without consideration belongs rather to a madman than to a man of war; for by such an ignorant bravery was Peter Strozzi lost at the Azores, when he fought against the Marquis of Santa Cruz. In like sort had the Lord Charles Howard, Admiral of England, been lost in the year 1588, if he had not been better advised than a great many malignant fools were, that found fault with his demeanour. The Spaniards had an army aboard them, and he had none; they had more ships than he had, and of higher building and charging; so that, had he entangled himself with those great and powerful vessels, he had greatly endangered this kingdom of England. For twenty men upon the defences are equal to a hundred that board and enter; whereas then, contrariwise, the Spaniards had a hundred for twenty of ours, to defend themselves withal. But our admiral knew his advantage and held it; which had he not done, he had not been worthy to have held his head."

The shift of the wind to the north-west had given the English the weather gage. They could run down before it on the enemy, and beat back against it in a way that was impossible for the clumsy galleons. Thus Howard and his captains could choose their own position and range during the fighting. It began by a pinnace, appropriately named the "Defiance," firing a shot at the nearest Spaniards, a challenge to battle. Medina-Sidonia held his course and took no notice of it. Howard's squadron now swept past his left, and then engaged his rear ships. The admiral himself in "The Ark" steered for De Leyva's tall galleon, the "Rata Coronada," perhaps taking her to be the flagship of the whole Armada. The two ships were soon in action, the English gunners firing at the Spaniard's great hull, and De Leyva's men aiming at the masts and yards of the "Ark" in the hope of bringing down her spars and sails, crippling and then boarding her. The better gunnery was on the English side. They fired three shots to the Spaniards' one, and every shot told on the huge target. And shots in the hull meant much loss of life and limb in the crowded decks.

As Recalde with the rear division shortened sail, and turned to the help of De Leyva, the "Ark" and her consorts bore away, only to return again to the attack, bringing their guns into action against Recalde's huge galleon, the "Santa Ana," and Pedro Valdes's ship, the "Rosario," "Capitana," or flagship of the Biscayan armada. These two had become separated from the main body with a few of her ships that now formed a kind of rearguard. Frobisher in the "Triumph" and Hawkins in the "Victory" were prominent in the attack. On the Spanish side several of the flagships joined in this rearguard fight. The admirals showed a chivalrous disposition to come to close quarters, and thus Howard was engaged with some of the largest and best commanded ships of the enemy. Oquendo, the admiral of Guipuzcoa, in his 1200-ton galleon, called, like that of Recalde, the "Santa Ana," had soon to draw out of the fight, with his ship on fire and badly damaged, not by the English cannon, but by a powder explosion on his main gundeck.[11] One only wonders that such accidents were not frequent on both sides, for the powder was ladled into the guns from open gunpowder kegs, and matches were kept burning beside each gun.

The "fighting loose and at large" went on for about three hours. Recalde's ship was badly hulled, and also had her rigging cut up and one of her masts damaged. Pedro Valdes's flagship, the "Rosario," was twice in collision with a consort, with disastrous results. Her bowsprit was carried away, and her foremast went over the side, the strain on the rigging bringing down the main topmast with it. When the English drew off just before sundown, Valdes was busy cutting away the wreckage. Medina-Sidonia shortened sail to enable the rearward ships to rejoin, and then held his course up Channel. Valdes sent a request to him that a ship should be detailed to tow the disabled "Rosario," which otherwise could not keep up with the fleet. It is generally stated that Medina-Sidonia took no notice of the message, and abandoned Valdes to his fate, but in his narrative the Duke reports to King Philip that he personally endeavoured to assist the disabled "Rosario," and succeeded in removing the wounded from her, only failing to save her "owing to the heavy sea and the darkness of the weather."

The English do not seem to have been troubled by the weather, and it cannot have been very bad, or the wounded could not have been taken by boats from Oquendo's ship. Evidently no great effort was made to succour the "Rosario," and the ships detailed for the work did not like to lie in isolation so near the English during the night. The impression in the Armada certainly was that the gallant Valdes had been shamefully abandoned by the admiral.

Before sunset a council of war had been held by Howard on board the "Ark." It was decided to follow up the Armada through the short summer night. To Drake in the "Revenge" was assigned the task of keeping touch with them and guiding the pursuit by displaying a large stern lantern on his ship.

After dark Howard lost sight of the lantern, and then thought he had picked it up again, but at daylight he found that he must have steered by a light in the Armada, for as the day broke he lay with only a few ships perilously near the main body of the enemy. Drake explained that in the darkness he had thought that some ships of the enemy were turning back, and had followed them. He had certainly failed in his important duty, and there was a suspicion that the veteran buccaneer was really manœuvring to make sure of a prize, for at sunrise his ship, the "Revenge," lay near the crippled "Rosario," which had been deserted by her consorts. He summoned Valdes to surrender, and the Spaniard, with his ship helpless and menaced by the main English fleet, hauled down his flag. The huge galleon was towed into Weymouth, the first prize of the campaign.

Howard had drawn off from the enemy, helped to secure the "Rosario," and rallied his own fleet, which had straggled during the night. This day, Monday, 1 August (or 22 July, Old Style), there was no fighting, the Armada working slowly up Channel, followed by the English out of cannon-range. Medina-Sidonia formed a rearguard of forty galleons and three galleasses, "in all 43 of the best ships of the Armada to confront the enemy, so that there should be no hindrance to our joining with the Duke of Parma; and the Duke with the rest of the Armada should go in the van, so that the whole fleet was divided into only two squadrons, Don Alonso de Leyva taking the rear under his charge." At 11 a.m. Oquendo's ship was reported to be sinking. Her crew and "the King's money" were taken out of her, and the "Santa Ana," largest but one of King Philip's galleons, disappeared under the grey-green waves of the Channel. In two days the Armada had lost two of its divisional flagships.