Towards the end of May 1819 Keats was again unwell and obliged to stay at home. Money worries returned yet again. In April he had remarked to George that he ‘was not worth a sixpence’ (L. ii. 93). By the end of the month he was thinking of moving to Teignmouth, or becoming a ship's surgeon.

On 8 June Rice called and invited Keats to accompany him to the Isle of Wight. By mid-June Keats was speaking of himself as engaged, and broke. He saw little of the Dilkes from now on, as they openly disapproved of the relationship with Fanny. On 16 June he learned that Mrs Midgley Jennings was filing a bill in Chancery against the Keats family, and asked Haydon and others for the return of loans. Haydon's refusal annoyed him. Keats and Rice left on the Portsmouth coach on 27 June in a violent storm. They crossed to the Isle of Wight and settled in Shanklin. He sent love letters to Fanny Brawne, and wrote verse constantly through late June and into the first week of July. Keats was in an irritable state of health, but had completed the first part of Lamia by mid-July. Brown joined them in Shanklin, and Keats worked with him on a drama, Otho. He also began to revise and rework Hyperion as The Fall of Hyperion. With Brown's arrival the party fell into a routine of late nights and cards, placing further strain on Keats's health. Rice left towards the end of August, and Keats was left alone for a while in Shanklin while Brown travelled about the island. Keats was now deeply immersed in several major poems simultaneously, and writing with the confident fluency of an artist at the height of his powers. On Brown's return, they decided to visit Winchester, primarily to gather materials for Keats's poetic projects. On 12 August, with Lamia half-finished, they left Shanklin, narrowly missing an accident in the crossing from Cowes.

The first four acts of Otho were completed by 14 August. Keats now broke off his friendship with Bailey, who after courting Reynolds's sister had married someone else. He wrote to him for the last time on the 14th, expressing his ambition to ‘make as great a revolution in modern dramatic writing as Kean has done in acting’ (L. ii. 139).