On October 4, 1189, Saladin moved to confront Guy of Lusignan east of Acre with an army twice as large as that of the Crusaders even though many additional soldiers and knights had arrived from many parts of Europe. "The crusader army (which consisted of 7,000 infantry and 400 cavalry) under Guy stood its ground in front of Saladin's forces. The Christian army consisted of the feudal lords of the kingdom, many smaller contingents of European crusaders, and members of the Military Orders. The Muslim army consisted of troops from Egypt, Turkestan, Syria, and Mesopotamia." The Templar knights were at first successful against Saladin but then pulled away to loot, and the Muslim army exacted a heavy toll. Guy's reserves were forced into battle thereby allowing an additional 5,000 Saracen troops to enter the fray. The Templars suffered great losses and their Grand Master Gerard de Ridefort was killed. Conrad had to be rescued by Guy and the Crusaders repulsed Saladin at the cost of 7,000 dead. The siege and fighting would continue for more than 15 months.

Saladin's vast army was able to surround both Acre and the Christian Crusader camp. Muslim galleys broke the Christian blockade to supply Acre, and an Egyptian fleet took control of the port and the road leading into it. On March 25, 1190, there was a sea battle between Conrad, de Montferrat and a some of Saldin's fleet. The ships in the Crusader fleet has only one row of oars and were called galliots by a witness of the battle who later published his account. The day was calm and quiet, Conrad's fleet arranged themselves in a crescent with strongest ships in the center. The battle was joined, ships were deliberately entangled with grappling irons and the Muslims used Greek Fire, which can only be extinguished with vinegar or peferably - sand. The crew of one captured and beached Muslim galley was murdered by women who ran up the beach from Acre. Savage fighting ended with a crusader victory.

Further Crusader reinforcements arrived from France, England and Swabia but disease epidemics broke out in camp as the water was polluted by human and animal corpses. Guy lost both his wife and daughters. The barons tried to maneuver Conrad into position for the throne of Jerusalem via a new and technically incestuous marriage. The Muslim garrison in Acre was also suffering and only a last ditch charge through the Christian camp allowed Saladin to bring fresh troops and food. The walls of Acre were crumbling in places, but no Crusader breakthrough occurred. Nonetheless, Saladin has lost the momentum and opportunity for two large Crusader armies were on their way lead by Richard the Lion Heart and Philip of France. King Richard arrived with a fleet of 100 ships and 8,000 men on April 20, 1191 and he immediately set about building siege engines. King Philip's army came with a fleet from Genoa on June 8, 1191.

The walls of Acre were breached but the Christian army was again driven out. Althought the Muslim garrison may have been twice the size of the crusader army, the city wanted to surrender. Saladin could not come to their rescue and terms were accepted on July 12. At Saladin's request, Conrad of Montferrat was recalled and acted as negotiator. He raised the flags of England, France, Austria and The Kingdom of Jerusalem as the Muslim garrison was taken into captivity. Now sadly, the brutality buried in each great leader surfaced. Angry at the pace and complexity of negotiations for prisoner ransoms, Richard had the entire 2700 man Muslim garrison executed. Saladin responded in kind and executed all Christian prisoners. The First Siege of Acre had ended, and no doubt the gods sighed in relief.

Richard's army left Acre and marched north between the Mediterranean Sea and Saladin's army. They fought on September 7 at Arsuf, north of Haifa, and Richad defeated Saladin. Haifa was captured on September 11 but Richard never did realize his goal of capturing Jerusalem. Conrad of Montferrat was elected King of Jerusalem in April 1192 but was assassinated a few days later. His pregnant queen Isabella was quickly married off to Richard and Philip's nephew, Henry of Champagne. After Richard's sister refused to marry Saladin's brother, the two great leaders made peace in 1192. Saladhin and the Muslims retained control of Jerusalem and would protect Christian pilgrims. The Crusaders kept Acre, the great fortress and port city but the True Cross had been lost.

By this time Muslim culture had begun to influence the European crusaders, first with medical care. Hospitals in Europe were places where people where left to die, they did not receive medical treatment. The Crusaders who were infested with at least three species of parasitic worms including the fish tapeworm they brought from Europe, began to be 'treated' with fresh fruits, vegetables and bread as were Muslims. Indeed when King Richard was ill, Saladhin sent his doctor with a special fruit juice that was cooled with snow.