Gage's military career in North America began in 1754, when he sailed with his regiment to serve in the last French and Indian War (1756–63). He participated in Gen. Edward Braddock's disastrous campaign in western Pennsylvania (1754) and in the successful operation against Quebec (1759–60). He was thereupon made governor of Montreal (1760) and promoted to major general (1761).

In 1763 Gage was appointed commander in chief of all British forces in North America—the most important and influential post in the colonies. Headquartered in New York, he ran a vast military machine of more than 50 garrisons and stations stretching from Newfoundland to Florida and from Bermuda to the Mississippi. He exhibited both patience and tact in handling matters of diplomacy, trade, communication, Indian relations, and western boundaries. His great failure, however, was in his assessment of the burgeoning independence movement. As the main permanent adviser to the mother country in that period, he sent critical and unsympathetic reports that did much to harden the attitude of successive ministries toward the colonies.

When resistance turned violent at the Boston Tea Party (1773), Gage was instrumental in shaping Parliament's retaliatory Intolerable (Coercive) Acts (1774), by which the port of Boston was closed until the destroyed tea should be paid for. He was largely responsible for inclusion of the inflammatory provision for quartering of soldiers in private homes and of the Massachusetts Government Act, by which colonial democratic institutions were superseded by a British military government. Thus Gage is chiefly remembered in the U.S. as the protagonist of the British cause while he served as military governor in Massachusetts from 1774 to 1775. In this capacity, he ordered the march of the redcoats on Lexington and Concord (Lexington and Concord, Battles of) (April 1775), which was intended to uncover ammunition caches and to capture the leading Revolutionary agitator, Samuel Adams, who escaped. This unfortunate manoeuvre signalled the start of the American Revolution; after the equally disastrous Battle of Bunker Hill in June, Gage was succeeded by Gen. Sir William Howe. He soon returned to England and was commissioned a full general in 1782.