Paget was promoted to major-general on 29 April 1802 and lieutenant-general on 25 April 1808. He commanded the cavalry for Sir John Moore's army in Spain; his cavalry showed distinct superiority over their French counterparts at the Battle of Sahagún in December 1808, where his men captured two French lieutenant colonels and so mauled the French chasseurs that they ceased to exist as a viable regiment. He also commanded the cavalry at the Battle of Benavente later in December 1808, where he defeated the elite chasseurs of the French Imperial Guard, and then commanded the cavalry again during the Retreat to Corunna in January 1809. This was his last service in the Peninsular War, because his liaison with Lady Charlotte, the wife of Henry Wellesley, afterwards Lord Cowley, made it impossible subsequently for him to serve with Wellington, Wellesley's brother. His only war service from 1809 to 1815 was in the disastrous Walcheren expedition in 1809, during which he commanded an infantry division. In 1810 he was divorced and then married Lady Charlotte, who had been divorced from her husband around the same time. He inherited the title of Earl of Uxbridge on his father's death in March 1812 and was appointed a Knight Grand Cross of the Order of the Bath on 4 January 1815.