Finally, under appointment of the state of Virginia as a deputy surveyor, he set out for Kentucky, knapsack on back and compass in hand, in the spring of 1780, and, after making extensive surveys between the Kentucky and Green rivers, returned to Philadelphia in the autumn of 1781. The next spring he invested in flour and goods the £150 (Pennsylvania currency that represented the 84,000 he had gathered in Continental currency, and began another tour of western adventure. At the mouth of the Muskingum the party was attacked by Indians, two of his companions were killed, nine taken prisoners, and his goods destroyed. Fitch had the address to conciliate the leader of the band, and the endurance to sustain the rigors of the captivity, from which he escaped, and in the winter of 1782-3, penniless and dejected, reached Warminster, Pennsylvania.  Here, 15 April 1785, he conceived the idea of steam as a motive power, at first for carriages, but soon for vessels. His first model of a steamboat, completed this year, bore wheels at the sides; but these, being fontal to labor too much in the water, were replaced (in his experiments of July 1786, upon a skiff with a steam engine of 3inch cylinder) with paddles.

He now besieged the Continental congress, as well as the Pennsylvania legislature, for pecuniary aid to his project, and addressed the leading scientific and public men of that day, everywhere and at all times boldly affirming the practicability of sea navigation by steam vessels. Yet, though he elicited much interest among the best minds, his fervid predictions secured no money, and he acquired the reputation of being insane. Finally, by the construction, engraving, and sale of a map of the northwestern territory, all of which was done with his own hand, the impressions being taken on a cider press, he raised about $800, in February 1787, formed a company of forty shares, and began a boat of sixty tons.

   Meanwhile, in 1786, the state of New Jersey, and in 1787 the states of New York, Delaware, Pennsylvania, and Virginia, had granted him the sole and exclusive rights to their waters for fourteen years for purposes of navigating by means of steam. Fitch's second boat, 45 feet long and 12 feet beam, with six oars or paddles on each side, and an engine of 12inch cylinder, made its trial trip on the Delaware, at Philadelphia, 22 August 1787, in the presence and to the great satisfaction of the members of the convention to frame the Federal constitution, then in session there. A still larger boat in October 1788, and still another in April 1790, continued to demonstrate with their increased speed and facility the value of Fitch's invention, the latter boat being run during the whole summer as a regular passenger boat between Philadelphia and Burlington with a speed of eight miles an hour.

Another boat, "The Perseverance" designed for both freight and passengers on the Mississippi, under the Virginia patent, which gave Fitch the exclusive right of navigating "the Ohio River and its tributaries" was unfortunately so damaged by a storm as not to be available before the expiration of the default clause in that patent. The stockholders became discouraged, and, Fitch's resources being exhausted, the project was abandoned.

   In 1791 he received a patent for his inventions from the United States, which was of little avail, and subsequently was lost by fire. In 1793 he went to France, there to build a steamboat; but, arriving in the midst of the revolutionary troubles, was unable to carry out his project, and, depositing his plans and specifications with the American consul at L'Orient, went to London. During this absence the consul loaned his drawings and papers to Robert Fulton, then in Paris, in whose possession they were for several months. In 1794, disappointed and penniless, Fitch returned to America, working his passage as a common sailor, and withdrew to his lands at Bardstown, Kentucky, which he found in the occupation of others; but in 1796 he again constructed a steamboat from a ship's yawl, which was moved by a screw propeller on the Collect Pond in New York City. In the spring of 1798 he made and tried, upon a small stream near Bardstown, a three-foot model of a steamboat: but some time between 25 June and 18 July of the same year he committed suicide by poison, died ill a tavern, unattended by relative or friend, and was buried in Bardstown, where no stone marks his resting place.