Queen Mary's death in 1694 had eventually led to a formal but cool reconciliation between William III and Princess Anne, now heir to the throne.

Marlborough had hoped that the rapprochement would lead to his own return to office, but although he and Lady Marlborough had been allowed to return to court, the Earl had received no offer of employment.

Marlborough, together with Godolphin, Admiral Russell, and the Duke of Shrewsbury, had in 1696 yet again been implicated in a treasonous plot with James II, this time instigated by the Jacobite militant John Fenwick.

The accusations were eventually dismissed as a fabrication and Fenwick executed—the King himself had remained incredulous—but it is not until 1698, a year after the Treaty of Ryswick brought an end to the Nine Years' War, that the corner is finally turned in William's and Marlborough's relationship.

On the recommendation of Lord Sunderland (whose wife is a close friend of Lady Marlborough), William eventually offers Marlborough the post of governor to the Duke of Gloucester, Anne's eldest son; he is also restored to the Privy Council, together with his military rank.

When William leaves for Holland in July, Marlborough is one of the Lords Justices left running the country in his absence; but striving to reconcile his close Tory connections with that of the dutiful royal servant is difficult, leading Marlborough to complain, "The King's coldness to me still continues." (Chandler, David G (2003). Marlborough as Military Commander. Spellmount Ltd)