Macready was instrumental in negotiating the truce in July 1921, although he suggested, perhaps in jest, that the entire Irish Dáil could be arrested whilst in session. He suffered the irritation of being found in contempt of court for refusing to obey an order of habeas corpus in the "Joseph Egan" case; but the Truce rendered the matter academic. Following the Anglo-Irish Treaty and creation of the Irish Free State in 1922, he withdrew the troops without great incident before the onset of the Irish Civil War.