The confident Gustav III did not wait for Greig's squadron to depart for the Mediterranean. In the form of an ultimatum, he ordered Russia to return all Finnish provinces to Sweden and, further, presumptuously demanded that Russia withdraw from the Crimea and forfeit all rights and claims to that peninsula. Incensed, the Russian empress ordered Greig to stay in the Baltic and prepare for war with Sweden. In May of 1788 the Swedish fleet, commanded by the King's brother, General-Admiral Carl, Duke of Sodermanland, left Karlskrone and headed for the Gulf of Finland. It was followed in early summer by Gustav III himself at the head of a squadron that carried landing forces.
The Swedes began with a sudden assault on the fortress at Neushlot on 21 June. Several days later Duke Carl, having captured the Russian picket frigates Hector and Yaroslavets at Revel, sailed into the Gulf of Finland. To repulse this attack, all the operable vessels of Kronstadt gathered together. The crews were quickly strengthened by recruits, and Catherine II commissioned Admiral Greig to head the fleet. On 6 July the opponents met off Hogland Island with forces of approximately equal strength. Greig had seventeen ships of the line and 1,236 cannon in his battle line, while Carl deployed fifteen ships of the line and five frigates with 1,180 guns in all.
The Battle of Hogland began with an attack upon the Swedish General-Admiral's fleet by Greig aboard the 100-gun Rostislav. Following Greig, Rear Admiral Timofey Kozlyaninov on the Vseslav, Captains Andrey Denisov on the Boleslav, Mikhail Borisov on the Mecheslav, John Trevenen on the Rodislav, and Grigory Mulovsky on the Mstislav joined the battle. Shrouded in smoke, Duke Carl's ship retreated. Inspired by this success, the crew of the Rostislav attacked the 70-gun Prince Gustav, commanded by Vice-Admiral Gustav Wachtmeister, and it also surrendered. The Russian seamen fought heroically, but the Swedes skilfully defended themselves. The enemy disabled the 74-gun Vladislav, which lost its steering and was then surrounded by Swedish vessels. The commander of the Vladislav, Commodore Berkh, surrendered to Colonel Chriesternin, the commander of the 62-gun Gustav Adolf. The fighting continued for six hours, and only after dark did the adversaries separate. The battle of Hogland would come to be known as one of the bloodiest conflicts in naval history.
The following morning casualties were counted as the cold northern sun brightened the sky. Russian losses totalled 1,767 officers and crew; the Swedes had lost 1,151 men. The same day, cutting his losses, Duke Carl retreated to Sveaborg with the wind aft. Having hastily patched up his ships, Greig followed in pursuit. On 26 July, near Sveaborg, Greig forced Chriesternin to strand his ship and strike its colours. Approximately 532 Swedish seamen, along with their commander, were captured and the ship Gustav Adolf was burnt within sight of the blockaded enemy.
The battle of Hogland was Greig's last; he died shortly after the conflict and Admiral Chichagov assumed command of the fleet. In the campaign of 1789 Vasily Chichagov combined twenty ships of the line from Revel and Kronstadt with ten Russian vessels which had wintered at Copenhagen. The result was one unified fleet. Having assembled 21 ships of the line and eight large frigates under his flag, Duke Carl decided to intercept Chichagov near Oland Island. Their fleets met on 15 July. The Russians took the defensive position, with the Swedes making some indecisive attacks and firing at long range. Having met with strong resistance, the Swedes soon disengaged themselves from the skirmish.
For three days the fleets maneuvered within sight of each other, but finally the Swedes retreated to Karlskrone. On 22 July off Bornholm Island the vessels of Admiral Chichagov joined Vice-Admiral Kozlyaninov's squadron, which had arrived from Denmark. Soon the combined Russian fleet, including 30 ships of the line and ten frigates, appeared off Karlskrone and blockaded the Swedes.
The Swedish galley fleet of Rear Admiral Ehrensverd also suffered a serious defeat. On 13 August at Rochensalm, it was attacked from both flanks by 86 rowing vessels of Rear Admiral Nassau-Ziegen's Russian squadron. The Swedes had a sizeable defence force, 49 vessels with 686 guns, and were not afraid to hold their position. However, the Russian seamen succeeded in breaking through and forced the enemy to retreat. Ehrensverd abandoned the seaside flank of his land forces, and soon the army retreated from its position on the Kymin River.
On 7 September 1789, a detachment of four ships of the line, two bombardier vessels, five frigates and eight launches commanded by Captain Trevenen attacked two Swedish coastal batteries in the Barezund Channel. Trevenen dispatched landing troops and seized both batteries along with all Swedish weaponry.