After the conclusion of the peace of Nicias (421 BC) he marched against the Argives in defence of Epidaurus, and after skilful manoeuvring surrounded the Argive army, and seemed to have victory within his grasp when he unaccountably concluded a four months' truce and withdrew his forces.
The Spartans were indignant, and when the Argives and their allies, in flagrant disregard of the truce, took Arcadian Orchomenus and prepared to march on Tegea, their fury knew no bounds, and Agis escaped having his house razed and a fine of 100,000 drachmae imposed only by promising to atone for his error by a signal victory. This promise he brilliantly fulfilled by routing the forces of the Argive confederacy at Mantinea (418), the moral effect of which was out of all proportion to the losses inflicted on the enemy. In the winter 417-416 a further expedition to Argos resulted in the destruction of the half-finished Long Walls and the capture of Hysiae. In 413, on the suggestion of Alcibiades, he fortified Decelea in Attica, where he remained directing operations until, after the battle of Aegospotami (405), he took the leading part in the blockade of Athens, which was ended in spring 404 by the surrender of the city.
Subsequently he invaded and ravaged Elis, forcing the Eleans to acknowledge the freedom of their Perioikoi (citizens of cities conquered by Sparta, who were given some privileges) and to allow Spartans to take part in the Olympic Games and sacrifices. He fell ill on his return from Delphi, where he had gone to dedicate a tithe of the spoils, and, probably in 401, died at Sparta, where he was buried with unparalleled solemnity and pomp.
He was succeeded by Agesilaus II.