In the “separate battle” at Guilford Courthouse, British forces attacking Lieutenant-Colonel Henry Lee’s flank corps found their flank and rear imperiled by the “Rockbridge Rifles” of Edward Stevens’ brigade of Virginia militia [Part 14].
The British drew men away from their primary attack to counter the Virginians, but they found the riflemen difficult to dislodge. Rifleman Andrew Wiley later remembered, “the British forces… were swept off [a ridge] by the Virginia Riflemen, but formed again and again”. 
The model battlefield as the battle winds down (click to enlarge). The Americans first line was behind the fields near the bottom of the image, the second line was in the woods in the center, and the third line was at the top (where miniature redcoats can be seen driving back the American Continentals). The green-coated British Legion cavalry are massed behind the infantry. The “separate battle” is occurring along the right edge of the image.
Meanwhile, Lee attempted to break off the action and join the Continentals on the third line. In his words:
Lee dispensed with his cavalry, heretofore held in the rear to cover retreat in case of disaster, ordering it to close with the left of the continental line, and there to act until it should receive further orders. Upon [Regiment von] Bose... [his troops] now turned with increased animation and with confidence of success. 
Lee’s men drove the Guardsmen and Hessians back a little ways. At that point:
Every obstacle now removed, Lee pressed forward... and joined his horse close by Guilford court-house.
However, by the time Lee’s troops reached the courthouse area, the battle for the third line was over. Lee then followed the rest of the army on its retreat.
After Lee retreated, the Rockbridge Rifles were the only sizable group of Americans left on the battlefield (Lee, perhaps, had been unaware of their presence). The Rifles soon were imperiled. At about the same time that Lee left the fight, British Lieutenant-Colonel Banastre Tarleton was dispatched to aid the Hessians and Guardsmen with part of his British Legion cavalry. Tarleton recalled that en route:
[they] found officers and men of both corps wounded, and in possession of the enemy: The prisoners were quickly rescued from the hands of their captors, and the dragoons… [continued on] without delay. As soon as the cavalry arrived, the guards and the Hessians were directed to fire a volley upon the largest party of the militia, and, under the cover of the smoke, Lieutenant-colonel Tarleton doubled round the right flank of the guards, and charged the Americans with considerable effect. The enemy gave way on all sides, and were routed with confusion and loss. 
Samuel Houston of the Rockbridge Rifles recalled running for his life from the charging horsemen: “we were obliged to run, and many were sore chased, and some cut down.” 
Houston and a number of other riflemen eventually found each other and made their way towards the American encampment.
Darkness and rainfall halted the movement of both armies. Houston’s party, which had several wounded men in it, spent a miserable night in the woods:
all being almost wearied out, we… encamped, where, through darkness and rain, and want of provisions we were in distress. Some parched a little corn. We stretched blankets to shelter some of us from the rain.
The British army encamped on the battlefield. Commissary General Charles Stedman recalled that:
The night… was remarkable for its darkness, accompanied with rain, which fell in torrents…. The cries of the wounded and dying who remained on the field of action during the night exceed all description. Such a complicated scene of horror and distress, it is hoped, for the sake of humanity, rarely occurs, even in a military life. 
British Lieutenant-General Charles Cornwallis had been victorious at the battle of Guilford Courthouse as a victory, but only in a very narrow sense. He had driven the Americans from field, but more than 1 in 4 of his men were killed or wounded in the process. He also failed to achieve his primary objective – restoration of a favorable strategic situation in the southern theater through the destruction of the American army.
American Major-General Nathanael Greene’s army, however, had been greatly damaged. Many of his Continentals had been killed or wounded, and much of his militia was scattered. Some of the North Carolina militia simply went home after the battle; some left out of disgust with what they felt was poor leadership by their commanders.
Greene’s situation was in a sense the opposite of that of Cornwallis. He had been unsuccessful on the tactical level (his defense-in-depth had not stopped the British attack), but he was closer than before to achieving his strategic objectives. Cornwallis gave up his pursuit of Greene’s army and moved eastward where he could be supplied. That move gave Greene an open road into South Carolina, and he soon undertook the reconquest of that state.
When Greene moved south, he expected Cornwallis would abandon North Carolina and try to defend British holdings in South Carolina. Instead, Cornwallis, after being resupplied, moved north into Virginia.
Cornwallis later explained that a retreat into South Carolina would have been difficult to undertake and would further weaken his army. Moreover, he suspected that the fight for control of the South Carolina backcountry would be over before his troops arrived. Cornwallis knew that Virginia was Greene’s main source of men and supplies. He reasoned that no action could better preserve British holdings in the south than taking Virginia out of the war. Furthermore, Virginia was vulnerable: its fine ports and rich plantations were defended by little more than militia.
Neither commander got exactly what he wanted from these moves. Greene had considerable trouble driving the British from the South Carolina backcountry; the campaign in this quarter dragged on for months. Cornwallis had an easy and successful campaign when he first arrived in Virginia, but he was unable to stop Greene’s activity in South Carolina. Furthermore, American resistance in Virginia grew stronger with time. By late summer, 1781, Cornwallis’ operations were largely confined to the coast, and in October his army was besieged and forced to surrender at Yorktown.
2. Lee's and Tarleton's accounts of the battle (among others) can be found in this compendium.
3. Houston's account appears in William Henry Foote (1855). Sketches of Virginia....
4. Charles Stedman. (1794). The History of the Origin, Progress, and Termination of the American War, Vol. 2.