Battle of Gettysburg Effect on the Confederacy: The Confederates had lost politically as well as militarily. During the final hours of the battle, Confederate Vice President Alexander Stephens was approaching the Union lines at Norfolk, Virginia, under a flag of truce. Although his formal instructions from Confederate President Jefferson Davis had limited his powers to negotiations on prisoner exchanges and other procedural matters, historian James M. McPherson speculates that he had informal goals of presenting peace overtures. Davis had hoped that Stephens would reach Washington from the south while Lee's victorious army was marching toward it from the north. President Lincoln, upon hearing of the Gettysburg results, refused Stephens's request to pass through the lines. Furthermore, when the news reached London, any lingering hopes of European recognition of the Confederacy were finally abandoned. Henry Adams wrote, "The disasters of the rebels are unredeemed by even any hope of success. It is now conceded that all idea of intervention is at an end."

The immediate reaction of the Southern military and public sectors was that Gettysburg was a setback, not a disaster. The sentiment was that Lee had been successful on July 1 and had fought a valiant battle on July 2–3, but could not dislodge the Union Army from the strong defensive position to which it fled. The Confederates successfully stood their ground on July 4 and withdrew only after they realized Meade would not attack them. The withdrawal to the Potomac that could have been a disaster was handled masterfully. Furthermore, the Army of the Potomac had been kept away from Virginia farmlands for the summer and all predicted that Meade would be too timid to threaten them for the rest of the year. Lee himself had a positive view of the campaign, writing to his wife that the army had returned "rather sooner than I had originally contemplated, but having accomplished what I proposed on leaving the Rappahannock, viz., relieving the Valley of the presence of the enemy and drawing his Army north of the Potomac." He was quoted as saying to Maj. John Seddon, brother of the Confederate secretary of war, "Sir, we did whip them at Gettysburg, and it will be seen for the next six months that that army will be as quiet as a sucking dove." Some Southern publications, such as the Charleston Mercury, criticized Lee's actions in the campaign and on August 8 he offered his resignation to President Davis, who quickly rejected it.

Gettysburg became a postbellum focus of the "Lost Cause", a movement by writers such as Edward A. Pollard and Jubal Early to explain the reasons for the Confederate defeat in the war. A fundamental premise of their argument was that the South was doomed because of the overwhelming advantage in manpower and industrial might possessed by the North. However, they claim it also suffered because Robert E. Lee, who up until this time had been almost invincible, was betrayed by the failures of some of his key subordinates at Gettysburg: Ewell, for failing to seize Cemetery Hill on July 1; Stuart, for depriving the army of cavalry intelligence for a key part of the campaign; and especially Longstreet, for failing to attack on July 2 as early and as forcefully as Lee had originally intended. In this view, Gettysburg was seen as a great lost opportunity, in which a decisive victory by Lee could have meant the end of the war in the Confederacy's favor.