After clearing the English out of Scotland, Wallace turned his mind to the administration of the country, and one of his early intentions was to resume commercial and diplomatic ties with Europe and win back the overseas trade which Scotland had enjoyed under Alexander III. Any evidence of his administrative acumen was probably destroyed by Edward's officials after his execution. There is, however, one Latin document in the archives of the Haneatic town of Lubeck, signed by Wallace in 1297, which told Lubeck and Hamburg that their merchants now had free access to all parts of the kingdom of Scotland, which had, by favour of God, been recovered by war from the power of the English.

Only one week after this document was signed, Wallace picked up the sword to mount an invasion of England. Crossing into Northumberland, the Scots followed the English army fleeing south in disarray. Caught between two armies, hundreds of refugees fled to safety behind the walls of Newcastle. The Scots laid waste a swathe of countryside before wheeling west into Cumberland and pillaging all the way to Cockermouth. Then, hearing that refugees in Northumbeland were returning to their homes, Wallace led his men back east and fired 700 villages.

Wallace's expidition into England brought the Scots great booty as wellas satisfying their appetites for revenge and slaughtering the English. Without siege engines, Wallace was unable to make any impression on the English strongholds in the north - in fact he was careful to avoid them - and when the Newcastle garrison marched out to battle with him in November he wisely turned north and headed for home. There was another great Scottish army in the west, known as the Men of Galloway, who were still besieging Carlisle Castle, but by December they had run out of provisions and retreated back across the Solway. Sir Robert de Cifford, Warden of the Western Marches, mounted a revenge raid into Scotland with his troops from the castle and local levies. Several towns and villages were burned, and over 300 Scots massacred at Lochar Moss. After a Christmas rest, de Clifford resumed the attack and in February destryoed Annan. This small but viciuos little local war was mounted largely in retaliation against young Robert Bruce, Earl of Carrick, who was suspected of having taken up arms against the English, although he took no part in the Battle of Stirling Bridge or its subsequent events.

On his return from England, laded with booty, Wallace found himself at the pinnacle of his power.

Preparations for a new English expedition against the Scots had been put in hand after the defeat at the Battle of Stirling Bridge, although Edward himself was bogged down with a war in Flanders. In October 1297, orders were given to raise 35,000 levies and for provisions to be shipped from east coast ports to Newcastle. Further levies were to be raised in Wales and marched to Durham and Newcastle. All was to be ready by 28th January 1298. On the 14th January, a parliament was held at York to which the Scottish magnates had been summoned in Edward's name. It is remarkable evidence of Wallace's standing at that ttime that not one of the Scottish nobles answered the summons to York.

Warenne, defeated at Stirling, was nevertheless again appointed to command the English army. Marching north from Newcastle, he quickly relieved Roxburgh and Berwick while the Scots fell back before his overwhelming forces, contenting themselves as before with guerilla style attacks. A despatch from Edward announcing a peace treaty with France and ordering Warenne to stay at Berwick pending his own arrival brought a pause in the fighting, during which Wallace initiated a scorched earth policy to deny the enemy any chance of living off the land as they advanced. Provisions were shipped from Ireland to Carlisle, and supply ships were made ready to sail to Berwick and Edinburgh when the latter fel into Englisg hands.