In February, 1781, the enemy's army in Virginia became such a source of terror to the people of that section that General Allen Jones was ordered to reinforce Gregory with troops from the Halifax District. But later that same month a greater danger confronted the patriot army in the South, and this order was countermanded. Most of the forces in the States were now hurried to the aid of General Greene, who had superseded Gates after the battle of Camden, and was leading Cornwallis an eventful chase across the Piedmont section of North Carolina. Cornwallis, after having been reinforced by General Leslie, had planned to invade North Carolina, conquer that State, march through Virginia and join Clinton in a fierce onslaught against Washington's army in the North. To foil the plans of the British officers Greene was concentrating the patriot troops in the South in the Catawba Valley, and Gregory was left with only a handful of men to hold the enemy at Norfolk in check.

In June, General Gregory's situation was so desperate that the Assembly again ordered General Allan Jones to send 400 men from Halifax District to North West Bridge to reinforce Gregory; and the latter officer was authorized to draft as many men as possible from the Edenton District.

General Jones informed the Assembly that he would send the troops as soon as possible, but that Gregory would have to provide arms, as he had no means of furnishing equipments for them.

Several engagements took place in June between the British and Americans in the Dismal Swamp region, and in one of them Gregory was repulsed and driven from his position. But in July he wrote to Colonel Blount reporting that his losses were trifling, and that he had regained his old post from the enemy. In August, 1781, a letter from General Gregory conveyed the joyful tidings that the enemy had evacuated Portsmouth. As his troops were no longer needed to guard against the danger of invasion from that direction, and as smallpox had broken out in his camp, General Gregory now released his men from duty, and they returned to their homes.

The British army that had just left Portsmouth, was now on its way to Yorktown, whither Cornwallis, after his fruitless chase of Greene, his disastrous victory at Guilford Courthouse, and his retreat to Wilmington, was now directing his army. There on the 19th of October the famous Battle of Yorktown was fought and Cornwallis and his entire army forced to surrender.

This battle virtually ended the war; but peace did not come to Carolina immediately upon the surrender. The Tories in the State kept up a constant warfare upon their Whig neighbors, and in March, 1782, General Greene, who not long after the battle of Guilford Courthouse had won a decisive victory at Eutaw Springs, and was still in South Carolina, sent the alarming intelligence to the towns on the coast that the British had sent four vessels from Charleston harbor to plunder and burn New Bern and Edenton. To meet this unexpected emergency, General Rutherford was ordered to quell the Tories in the Cape Fear section, who were terrorizing the people in that region. And in April, 1782, General Gregory received orders from General Burke to take 500 men to Edenton for the defense of that town, and to notify Count de Rochambeau as soon as the enemy should appear in Albemarle Sound. In August no sign of the British ships had as yet been seen, though the coast towns were still in daily dread of their arrival. Governor Martin, who had succeeded Burke, wrote Gregory to purchase whatever number of vessels the Edenton merchants considered necessary for the protection of the town, to buy cannon and to draft men to man the boats.

But Edenton was spared the horror of a second raid such as she had suffered in 1781. In December, 1782, the British army in South Carolina, which since the battle of Eutaw Springs had been hemmed in at Charleston by General Greene, finally embarked for England. The ships that had been keeping the towns near the coast in North Carolina in terror, departed with them, and the States that had for so many long and bitter years been engaged in the terrific struggle with England, were left to enjoy the fruits of their splendid victory without further molestation from the enemy.

In September, 1783, the Treaty of Peace was signed by Great Britain, and the United States, separately and individually, were declared to be "free, sovereign and independent States."

General Gregory's services to his State did not end with the war. Eight times from 1778 to 1789, we find him representing Camden County in the State Senate, serving on important committees, and lending the weight of his influence to every movement tending toward the prosperity and welfare of the State. In the local affairs of his neighborhood he also took a prominent part. In 1789 the Currituck Seminary was established at Indian Town, and Isaac Gregory and his friend and brother officer, Colonel Peter Daugé, were appointed on the board of trustees of this school, which for many years was one of the leading educational institutions of the Albemarle section.

General Gregory lived at the Ferebee place in Camden County in a large brick house, known then, as now, as Fairfax Hall. The old building is still standing, a well known landmark in the county.