Lee, despite being outnumbered by a ratio of over two to one, won arguably his greatest victory of the war, sometimes described as his "perfect battle."^[25] But he paid a terrible price for it, taking more casualties than he had lost in any previous battle, including the Confederate defeat at the Battle of Antietam. With only 60,000 men engaged, he suffered 13,303 casualties (1,665 killed, 9,081 wounded, 2,018 missing),^[34] losing some 22% of his force in the campaign—men that the Confederacy, with its limited manpower, could not replace. Just as seriously, he lost his most aggressive field commander, Stonewall Jackson. Brig. Gen. Elisha F. Paxton was the other Confederate general killed during the battle. After Longstreet rejoined the main army, he was highly critical of Lee's strategy, saying that battles like Chancellorsville cost the Confederacy more men than it could afford to lose.^[26]

Hooker, who began the campaign believing he had "80 chances in 100 to be successful", lost the battle through miscommunication, the incompetence of some of his leading generals (most notably Howard and Stoneman, but also Sedgwick), but mostly through the collapse of his own confidence. Hooker's errors included abandoning his offensive push on May 1 and ordering Sickles to give up Hazel Grove and pull back on May 2. He also erred in his disposition of forces; despite Abraham Lincoln's exhortation, "this time put in all your men," some 40,000 men of the Army of the Potomac scarcely fired a shot.

The Union was shocked by the defeat. President Abraham Lincoln was quoted as saying, "My God! My God! What will the country say?" A few generals were career casualties. President Lincoln chose to retain Hooker in command of the army, but the friction between Lincoln, general in chief Henry W. Halleck, and Hooker became intolerable in the early days of what would become known as the Gettysburg campaign and Lincoln relieved Hooker of command on June 28, just before the Battle of Gettysburg.

The Confederate public had mixed feelings about the result, joy at Lee's tactical victory tempered by the loss of their most beloved general, Stonewall Jackson. The death of Jackson caused Lee to make the long-needed reorganization of the Army of Northern Virginia from two large corps into three, under James Longstreet, Richard S. Ewell, and A.P. Hill. The new assignments for the latter two generals caused some command difficulties in the upcoming Gettysburg campaign, which began in June. Of more consequence for Gettysburg, however, was the supreme confidence that Lee gained from his great victory at Chancellorsville, that his army was virtually invincible and would succeed at anything he asked it to do.^[27]