After the Restoration in 1660, Baxter, who had helped to bring about that event, settled in London. He preached there until the Act of Uniformity 1662 took effect, and looked for such terms of comprehension as would have permitted the moderate dissenters with whom he acted to have remained in the Church of England. In this hope he was sadly disappointed. The goal of comprehension was obstructed by forces on both sides: by conforming churchmen and dissenters alike. The Savoy Conference resulted in Baxter's Reformed Liturgy, though it was cast aside without consideration. Baxter continued to advocate for a comprehensive "national church", off and on, until his death.

The same reputation which Baxter had obtained in the country he secured in London. The power of his preaching was universally felt, and his capacity for business placed him at the head of his party. He had been made a king's chaplain, and was offered the Bishopric of Hereford, but he could not accept the offer without assenting to things as they were. After his refusal, he was not allowed, even before the passing of the Act of Uniformity, to be a curate in Kidderminster, and Bishop George Morley prohibited him from preaching in the Diocese of Worcester.

On 10 September 1662, Baxter married Margaret Charlton, a woman like-minded with himself. She died in 1681 and Baxter wrote the words for the hymn Ye Holy Angels Bright in that year.

Legal troubles

From 1662 until the indulgence of 1687, Baxter's life was constantly disturbed by persecution of one kind or another. He retired to Acton in Middlesex, for the purpose of quiet study, but was placed in prison for keeping a conventicle. Baxter procured a habeas corpus in the court of common pleas.

He was taken up for preaching in London after the licences granted in 1672 were recalled by the King. The meeting house which he had built for himself in Oxendon Street was closed to him after he had preached there only once.

In 1680, he was taken from his house; and though he was released that he might die at home, his books and goods were seized. In 1684, he was carried three times to the sessions house, being scarcely able to stand, and without any apparent cause was made to enter into a bond for £400 in security for his good behaviour.

But his worst encounter was with the Chief Justice, Sir George Jeffreys, in May 1685. He had been committed to the King's Bench Prison on the charge of libelling the Church in his Paraphrase on the New Testament, and was tried before Jeffreys on this accusation. No authoritative report of the trial exists; if the partisan account on which tradition is based is accepted, Jeffreys was infuriated. Baxter was sentenced to pay 500 marks, to lie in prison till the money was paid, and to be bound to his good behaviour for seven years. Jeffreys is even said to have proposed he should be whipped behind a cart. Baxter was now approaching 70 years old, and remained in prison for 18 months, until the government, hoping to win his influence, remitted the fine and released him.