In 208 AD, Cao Cao announced in the imperial court the abolition of the Three Excellencies system, restored the position of Chancellor, and appointed himself to the role. He then led his army south to attack Liu Biao, who controlled Jingzhou. Within a month of the war's start, Liu Biao died of illness, and his son Liu Cong succeeded him as Governor of Jingzhou. Another month later, the cowardly Liu Cong, under threats and bribes from Cao Cao's generals, surrendered to Cao Cao.
At that time, Liu Bei was the Left General of Jingzhou, and after Cao Cao attacked Jingzhou, he had been stationed with his troops in Fancheng. Liu Cong surrendered to Cao Cao without consulting Liu Bei and did not inform him of his surrender. Liu Bei was kept in the dark, completely unaware that danger was approaching him. After Cao Cao took control of Jingzhou, he led his main army toward Fancheng, and it was only when Cao's forces reached Wancheng that Liu Bei finally realized what was happening. Enraged, Liu Bei sent someone to confront Liu Cong, who then had no choice but to confess his surrender. After much deliberation, Liu Bei concluded that he could not defeat Cao Cao with his own strength alone, so he set off in retreat and fled to Jiangling.
Jiangling was a key stronghold in Jingzhou, stocked with military equipment and grain. Cao Cao, fearing that Liu Bei would seize Jiangling and greatly increase his power, personally led five thousand elite cavalry to pursue Liu Bei, eventually intercepting him at Changban in Dangyang (northeast of present-day Dangyang, Hebei). At the time, Liu Bei was traveling with a large amount of military supplies and many civilians who had followed him, which made his march extremely slow. After Cao Cao caught up, Liu Bei abandoned his wife, children, and the people, fleeing on horseback with Zhang Fei, Zhao Yun, and Zhuge Liang. As expected, Cao Cao easily seized Liu Bei's supplies and captured both his wives and his young son, Liu Shan.
Seeing his lord's family captured, Zhao Yun risked danger and charged back into Cao Cao's encirclement. After a fierce battle, he finally rescued Liu Bei's wife and child. Meanwhile, Zhang Fei guarded a bridge with just over twenty men. When Cao's troops reached the bridge, Zhang Fei roared, "Zhang Yide is here! Who dares to come forward and fight to the death?" The Cao army was so terrified by Zhang Fei's furious shout that not a single soldier dared to challenge him, and they could only watch helplessly as Liu Bei's group retreated further and further away.
After Jiangling was captured by Cao Cao, Sun Quan of Eastern Wu began to worry. If Cao Cao took the opportunity to attack Jiangdong, Eastern Wu would face the danger of destruction. Some of Eastern Wu's ministers advocated surrendering to Cao Cao, while others suggested fighting against him. Sun Quan pondered back and forth, unsure which side to agree with. At this time, Cao Cao sent a letter to Sun Quan, threatening him to give up resistance. Those who advocated surrender became even more determined upon seeing it. General Lu Su said to Sun Quan that surrender only applied to the minor officials under Sun Quan's command; if Sun Quan surrendered, Cao Cao would surely have murderous intentions, so it was better to fight to the death, perhaps with a chance of victory. Sun Quan thought carefully, realizing that Lu Su's words were all sincere, and then declared war against Cao Cao. He ordered Lu Su to recall Zhou Yu, and then appointed Huang Gai, Han Dang, Lü Meng, Gan Ning, Zhou Tai, and others as generals, leading thirty thousand soldiers into battle.
Zhou Yu suggested that Sun Quan and Liu Bei join forces, so Sun Quan approached Liu Bei to discuss strategies against Cao Cao together. Subsequently, Liu Bei ordered 20,000 naval troops to rendezvous with Zhou Yu's army at Fankou, and they stationed themselves at Red Cliffs.
Just then, a plague broke out in Cao Cao's camp, causing heavy casualties among his soldiers. With no energy left to fight, everyone only hoped to save their own lives. Cao Cao engaged in a small skirmish with Zhou Yu but was defeated, so he had to move his navy to the northern bank at Wulin to rest and recuperate, waiting for the right opportunity to launch another attack. Zhou Yu gathered all his troops on the southern bank at Red Cliffs, facing Cao Cao from a distance.
Cao Cao's navy was converted from his land army, and most of the soldiers were unfamiliar with the water, with many suffering from seasickness and constantly vomiting. Cao Cao came up with a solution: he ordered his men to connect the ships end to end with thick iron chains, ensuring the vessels would not sway from side to side, so that people walking on them would not feel dizzy. After solving the seasickness problem, Cao Cao focused entirely on training his navy, preparing to wipe out Zhou Yu and Liu Bei in one fell swoop.
Scouts from Wu learned that Cao Cao's ships were linked together with iron chains and quickly reported to Zhou Yu. As Zhou Yu was pondering a strategy, his subordinate Huang Gai proposed a plan. Huang Gai believed that since Cao Cao's ships were connected end to end, their mobility and agility were greatly reduced, and if fire were used, the entire fleet would be burned to ashes in no time. Zhou Yu praised this idea highly but soon grew worried—the plan was good, but how could they set Cao Cao's ships ablaze? Just then, Huang Gai suddenly announced he would defect to Cao Cao, which delighted Cao Cao and infuriated Zhou Yu. Zhou Yu had Huang Gai arrested and, in front of the entire army, severely beat him with a whip. Huang Gai did not beg for mercy and was soon covered in wounds. His determination to surrender to Cao Cao seemed unwavering, and Zhou Yu, unable to change his mind through punishment, let him go. Thus, Huang Gai first sent a letter of surrender to Cao Cao, then led his men aboard several ships heading north. Cao Cao and his officers waited on the shore, excited as they saw Huang Gai's fleet approaching. Just as the ships neared the shore, thick smoke suddenly rose from each vessel, followed by raging flames. This was Zhou Yu's counter-plot: Huang Gai's feigned surrender, combined with the likelihood of an easterly wind blowing toward Cao Cao's position. Huang Gai and his soldiers had loaded the ships with firewood and drenched it in oil, covered it with cloth, and placed many flags on the outside. Taking advantage of Cao Cao's relaxed guard, Huang Gai gave the order, and the soldiers set the firewood ablaze. The ships sped toward the northern shore with the wind. Cao Cao's ships were quickly ignited by Huang Gai's fire, and because they were chained together, the chains could not be removed in time. Many of Cao Cao's soldiers were burned to death or drowned. In the Battle of Red Cliffs, Cao Cao lost over half his forces and was unable to launch further military campaigns in the south. Seizing this opportunity, Sun Quan and Liu Bei expanded their territories: Liu Bei captured Lingling, Wuling, Guiyang, and Changsha south of the Yangtze River, while Sun Quan took Jiangling. Cao Cao, aside from controlling most of the north, also held Nanyang and Nan commanderies in the south, laying the foundation for the tripartite balance of power among the Three Kingdoms.