Hinojosa was much chagrined at this exploit, and determined on revenge; but as he wished to give his conduct on the occasion some appearance of justice, he directed some of the inhabitants of Nombre de Dios to enter a regular accusation before the Doctor Ribera, the governor of that place, giving an exaggerated account of the insolent invasion of his government by Verdugo, who without any just pretence, had levied contributions, imprisoned the magistrates, and invaded the town of Nombre de Dios on his own private authority. They were likewise instructed to request Ribera to march in person to chastise the insolence of Verdugo, and Hinojosa offered to accompany him on this expedition with his troops. Ribera, who appears to have been then resident in Panama, agreed to all that was desired, and, accepted the proffered military aid to drive Verdugo from his government; on which Hinojosa and his officers swore to obey his orders as their commander on this expedition, and the troops were put in motion to march across the isthmus. On receiving notice of the approach of Hinojosa, Verdugo disposed his troops to defend the place, and caused the inhabitants of Nombre de Dios to take up arms, in addition to his own men. But as it was obvious that the inhabitants shewed no inclination for fighting, Verdugo suspected they might abandon him while engaged, and came therefore to the resolution of abandoning the town, and took post on the shore near his small barks. He waited for Hinojosa in that situation, having some boats in his rear, which he had seized to enable him to secure his retreat in case of necessity. Immediately on his arrival, Hinojosa attacked Verdugo, and several persons were killed at the first brunt. As the inhabitants of Nombre de Dios who were along with Verdugo, observed their governor acting as commander of the adverse party, they withdrew on one side from the engagement into an adjoining wood; by which the soldiers belonging to Verdugo were thrown into disorder, and they were forced to take to their boats and retreat on board their barks.

After this repulse, Verdugo took possession of several ships that lay at anchor near Nombre de Dios, the largest of which he armed with some pieces of artillery and endeavoured to cannonade the town. But finding that he could do very little injury to the place, which was situated in a bottom, and as he was in want of provisions, and most of his soldiers had been left on shore, he retired with his small vessels and the ship he had seized to Carthagena, to await a more favourable opportunity of annoying the insurgents. Having restored Nombre de Dios to order, Ribera and Hinojosa left a sufficient garrison in the place, under the command of Don Pedro de Cabrera and Hernan Mexia, and returned to Panama, where they proposed to wait for such orders as might be sent from Spain respecting the troubles in Peru.

On arriving at Popayan, as formerly related, the viceroy collected all the iron which could be procured in the province, erected forges, and procured workmen, so that in a short time he got two hundred musquets constructed, besides other arms both offensive and defensive, and provided every other species of warlike stores. Learning that the governor, Benalcazar, had detached a brave and experienced officer, named Juan Cabrera, to reduce some refractory Indians, with an hundred and fifty soldiers; the viceroy wrote a letter to Cabrera, in which he gave a detailed account of the insurrection and usurpation of Gonzalo Pizarro, and of his own determination to restore the kingdom of Peru to allegiance whenever he could collect a sufficient number of troops for that purpose. He earnestly intreated therefore, that Cabrera would immediately join him at Popayan with all his men, that they might commence their march together for Quito, to punish the rebellious usurper. To induce compliance, he represented in strong colours to Cabrera, the great and signal service which he had in his power to perform for the sovereign on this occasion; which likewise would be far more advantageous to his own personal interests, than any which could accrue from the expedition in which he was now engaged; as, on the defeat of Pizarro, he would be entitled to partake in the distribution of the lands belonging to Gonzalo and his partizans, and he might depend on being gratified with ample possessions for himself and his followers in the best districts of Peru. Farther to encourage Cabrera, the viceroy informed him of the events which had lately occurred in the south of Peru, where Centeno had erected the royal standard at the head of a respectable force; so that the present conjuncture was extremely favourable for an attack on Gonzalo, who could hardly resist when pressed from both extremities of the kingdom at once; and besides, that the inhabitants of Peru were now quite weary of the tyrannical violence and extortion of Gonzalo, and would doubtless revolt against him on the first favourable opportunity. As an additional inducement to Cabrera to join him, the viceroy sent him an order by which he was authorized to take from the royal coffers at Carthagena, Encelme, Cali, Antiochia, and other places, to the extent of 30,000 pesos for the pay and equipment of his troops; and as Cabrera acted under the orders of Benalcazar, he procured letters to him from that governor by which he was commanded immediately to obey the requisition of the viceroy. On receiving these dispatches, Cabrera immediately secured the funds which he was authorized to take, which he divided among his men, and set out with all possible expedition to join the viceroy at Popayan with an hundred well appointed soldiers. The viceroy had likewise sent orders for reinforcements from the new kingdom of Grenada, the province of Carthagena, and other places, so that his troops daily increased; and having learnt the capture of his brother Vela Nunnez, and the loss of Yllanez and his troops, he had no expectation of procuring any additional reinforcements.

At this time, Gonzalo Pizarro was very anxious to devise some stratagem for inveigling the viceroy into his hands, as he considered his usurpation unsafe so long as that officer remained alive and at the head of a military force. With this view, that the viceroy might return into Peru where he might have it in his power to bring him to action, Gonzalo gave out that he intended to proceed to Las Charcas at the southern extremity of Peru, to repress the disorders occasioned by Centeno, leaving Captain Pedro de Puelles at Quito with three hundred men to oppose the viceroy. He proceeded even ostensibly to take such measures as were proper for executing this design; selecting such troops as were to accompany himself to the south, and those who were to remain at Quito; even distributing money to both divisions, and set off on his march for the south after a general muster and review of his army. Gonzalo contrived that intelligence of these proceedings should be conveyed to the viceroy, by means of a spy in the employment of that officer, who had betrayed his trust, and had even communicated to Gonzalo the cypher which he used in corresponding with his employer. Gonzalo made this person send intelligence to the viceroy of these pretended motions; and Puelles wrote likewise to some friends in Popayan, as if privately to inform them that he was left in the command at Quito with three hundred men, with which he believed himself able to resist all the force the viceroy might be able to bring against him; and these letters were sent purposely in such a manner that they might fall into the hands of the viceroy. Gonzalo likewise took care to spread these reports among the Indians who were present at the review, and who, having seen Gonzalo set off on his march to the south, were perfectly acquainted with the number of troops which accompanied him on the march, and of those which remained under Puelles at Quito. To give the greater appearance of truth to these reports, Gonzalo actually set out on his march; but halted at two or three days journey from Quito, under pretence of falling sick.