As day broke on 4 May, the Lancastrians took up a defensive position a mile south of the town of Tewkesbury. To their rear were River Avon and the Severn. Tewkesbury Abbey was just behind the Lancastrian centre. A farmhouse then known as Gobes Hall marked the centre of the Lancastrian position; nearby was "Margaret's camp", earthworks of uncertain age. Queen Margaret is said to have spent the night at Gobes Hall, before hastily taking refuge on the day of battle in a religious house some distance from the battlefield. The main strength of the Lancastrians' position was provided by the ground in front, which was broken up by hedges, woods, embankments and "evil lanes". This was especially true on their right.

The Lancastrian army numbered approximately 6,000. As was customary at the time, it was organised into three "battles". The right battle was commanded by the Duke of Somerset. A stream, the Colnbrook, flowed through his position, making some of the ground difficult to traverse. The Lancastrian centre was commanded by Baron Wenlock. Unlike the other principal Lancastrian commanders, Wenlock had deserted the Lancastrian cause after the First Battle of Saint Albans, only to revert to the Lancastrians when he was deprived by Edward IV of the Lieutenancy of Calais. Prince Edward was present with the centre. At eighteen, Prince Edward was no stranger to battlefields, having been given by his mother the task of condemning to death Yorkist prisoners taken at the Second Battle of St Albans, but he lacked experience of actual command. The left battle was commanded by the Earl of Devon, another devoted Lancastrian. His battle, and part of the centre, occupied a low ridge known locally as the "Gastons". A small river, the Swilgate, protected Devon's left flank, before curving behind the Lancastrian position to join the Avon.

The Yorkists numbered 5,000 and were slightly outnumbered by the Lancastrians. Like the Lancastrians, Edward organised his army into three battles.

Edward's vanguard was commanded by his youngest brother, Richard, Duke of Gloucester. Although he was only eighteen years old, Richard was already an experienced commander and had led a division at the Battle of Barnet. Edward himself commanded the main battle, in which Clarence was also stationed. Edward was twenty-eight years old, and at the height of his prowess as a soldier. His lifelong friend and supporter, Lord Hastings, commanded the rear. He too was an experienced commander and like Richard, had accompanied Edward into exile in the Low Countries and had led a battle at Barnet.

Although by tradition, the vanguard occupied the right of the line of battle, several authors have conjectured from descriptions in near-contemporary accounts (such as the Historie of the Arrivall of Edward IV) that Richard of Gloucester's division actually took position to the left of Edward's battle or that the divisions of Edward's army advanced in line ahead, with Edward's division leading.

King Edward made one other important tactical disposition. To the left of his army was a thickly wooded park. Concerned that hidden Lancastrians might attack from this quarter, he ordered 200 mounted spearmen to occupy part of the woods and prevent the Lancastrians making use of them, or act on their own initiative if they were not themselves attacked. He then "displayed his bannars: dyd blowe up the trompets: commytted his caws and qwarell to Almyghty God, to owr most blessyd lady his mother: Vyrgyn Mary, the glorious Seint George, and all the saynts: and advaunced, directly upon his enemyes"

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