Monmouth was originally being built as an East Indiaman for the East India Company under the name Belmont. In 1796 the Navy purchased five ships being built or serviced in commercial dockyards along the River Thames and had them completed as warships. Alongside Belmont, then being built at Rotherhithe by Randall & Company, the Navy acquired the merchantmen Royal Admiral, Princess Royal, Earl Talbot and Pigot; they became HMS York, HMS Ardent, HMS Agincourt and HMS Lancaster respectively. Belmont was registered and named Monmouth on 14 July 1795 and was launched on 23 April 1796, being completed by 31 October 1796 at Deptford Dockyard.
HMS Monmouth was commissioned in September 1796 under the command of the Captain William Carnegie, Earl of Northesk. She was initially assigned to serve in the North Sea, and in May 1797 was one of the ships involved in the Nore mutiny. The crew took her first lieutenant, Charles Bullen, prisoner and threatened to execute him. Northesk intervened and Bullen was able to carry messages from the crew that are said to have helped end the mutiny. After the mutiny Northesk resigned his commission. Order was restored in a matter of weeks, and Monmouth was placed under Commander James Walker, in an acting captaincy. Walker had been planning to attack the mutinous ships at anchor with a squadron of gunboats only a few weeks previously.
Before the battle Walker addressed his crew, saying:
"Now, my lads, you see your enemy before you. I shall lay you close on board, and thus give you an opportunity of washing the stain off your characters with the blood of your foes. Go to your quarters, and do your duty."