After the victory, Alexander did not make a rush into the heart of the Persian empire, as might have been expected, but rather persisted in his gradual approach of securing coastal areas. Though Alexander continued to break down the Persian fleet, his strategy also gave Darius time to raise a larger army.

Darius also made a first attempt to achieve a peaceful settlement. Although the tone of his letter was arrogant, he offered to cede a significant portion of Asia Minor to Alexander. The concession was difficult to refuse, as the offered area had probably been the objective of Philip's campaign. When Alexander read the letter to his officers, therefore he omitted the section that included the offer. The offers, who heard only Darius's arrogant tone, urged Alexander to continue with the campaign. Alexander sent back a harsh reply justifying the Macedonian mission. It became evident to all that the war would have to come down to a final showdown for the kingdom.

In the meantime, Alexander began his march into the Phoenician territory, where every city-state was under the rule of Persia, but almost all reluctantly. Many cities forced their Persian puppet rulers to surrender to the Macedonians. Alexander replaced the rulers with popular successors, thereby winning himself significant local support.

The one city that chose to oppose Alexander was Tyre, which had long been faithful to Persia and had been the only Phoenician city not to participate in the revolt of the 340s B.C. The Tyrians put up such a strong fight that Alexander succeeded only after seven months, after recruiting ships from Sidon to fend off the Tyrian fleet. The main difficulty, however, was the strength of Tyre's heavily guarded city wall.

Alexander caught a break only when the Tyrians, exhausted and low in morale, took a gamble and launched a surprise sea attack. By luck, Alexander had not been in the location of the attack as the Tyrians had assumed he would be. He was able to round up his ships and catch the Tyrians from the rear. At this point it was only a matter of time before the wall of Tyre was breached. Once again, the slaughter was ruthless. Almost no males were spared; the women and children, numbering 30,000, were sold into slavery. The siege, which finally came to its end in July 332 B.C., is considered, from a purely military standpoint, to be Alexander's greatest achievement.

The victory at Tyre, combined with successful resistance to Persian counterattacks, led to Darius's second offer of peace. He offered 10,000 talents for the release of his family and even more territory. He also invited Alexander to marry his daughter and become the friend of the Persian royal house. More confident after the siege of Tyre, Alexander read the letter to his officers. Despite Parmenion's advice, Alexander refused to negotiate, and instead replied with another harsh letter.

After Alexander's forces took Gaza, the path to Egypt opened up. In ancient times, Egypt was the goal of many foreign empires, as its wealth was considerable. The land also presented a challenge, however, as it was surrounded by desert on three sides. The Egyptians, who deeply resented Persian rule, surrendered to Alexander without a fight. Alexander was crowned Pharaoh and underwent all the traditional rituals; he won over popular support by a careful display of religious piety. When Alexander died and his empire was distributed, Egypt would be claimed by Ptolemy, who set up a private estate and created a dynasty that benefited from Alexander's popular reception. In 331 B.C., the new Pharaoh began to explore the lower part of his territory. In the western part of the Nile Delta he found a coastal region that appeared suitable for a city; soon Alexandria–named such even to this day–was founded.

By the spring of 331 B.C., the Macedonian army was on its way back to Phoenicia, where it would begin the final preparations for the Persian invasion. Alexander had to tend to several administrative matters among the various governments and rulers he had installed. In the meantime, Darius organized and stationed his Grand Army on the Euphrates at Babylon, the capital of Mesopotamia. Darius, who expected Alexander's route to follow the Euphrates, hoped to gain an advantage by choosing his own optimal battleground. Moreover, Darius sent a scout to disrupt the expected route, in order to make Alexander's journey as difficult as possible.

Alexander, however, saw through this plan completely, so he took a longer route that ran by the Tigris River. He recognized that the Persians would either lose spirit and energy in their extended wait, or else be forced to meet him at the Tigris. Darius decided to try to ambush the Macedonians as they were crossing the river–a tactic that required the Macedonians not only reach the area before Alexander, but also correctly predict where he would try to cross. Alexander had the fortune of capturing some Persian scouts and learning Darius's plans. He was able to change routes and cross the river undisturbed, though the crossing was difficult and a Persian ambush would have been devastating. Darius's plans had, then, been foiled a second time, and his only recourse was to find the most suitable ground for battle at this point. He chose a field near the village of Gaugamela.

The battle took place on October 1, 331 B.C. Darius's army stood on the strength of its 34,000 cavalry, who were well trained and equipped. His infantry, which may have amounted to nearly 100,000, was of little value beyond the core group of 2,000 Greek mercenaries and the 2,000 Persians who constituted the royal bodyguard. Though Alexander's army was considerably smaller, he employed his troops efficiently. Timing the attack perfectly, he began by fighting on the defensive until he saw the gap that his Companions could exploit. Soon, Darius was in danger of being encircled, and he was again forced to flee. Alexander stayed to carry out the battle, which again ended in a rout. The decisive battle proved to be one of the influential in world history. Alexander had essentially crippled Darius, and all that remained was a formal handover of power.