The US carrier air groups had suffered minimal personnel losses with nine US aircraft shot down and three pilots subsequently recovered by nearby ships or submarines. These unbalanced results were due, at least in part, to a lack of experience among Japanese pilots, and indeed Imperial Japanese army air service fighter pilots stationed to the north of the Philippine islands group were still in training. The majority of the Japanese fighter aircraft reported by US pilots were Imperial Japanese army air service types, primarily the Nakajima Ki-44 'Tojo', Kawasaki Ki-61 'Tony' and Nakajima Ki-43 'Oscar' single-engined fighters. Even though there were some experienced Japanese naval pilots operating at this time, the Imperial Japanese navy air service’s Mitsubishi A6M Reisen 'Zero' single-engined fighter units reconstituted after the 'Battle of the Philippine Sea' were flying obsolescent if not actually obsolete aircraft and still learning to work together, and therefore could not execute the kind of section or division flying that yielded tactical advantage.

Though the day’s remaining carrier attacks by Hellcat fighters, Curtiss SB2C Helldiver single-engined dive-bombers and Grumman TBF Avenger single-engined torpedo/level bombers did significant damage to military installations on Formosa, they failed to effect the complete neutralisation of Japanese air power based on the island. The Japanese response was well suppressed, however, and the only effective counterattack mounted against the ships of TF38 came from Japan itself. The elite T Attack Force, unit trained for all-weather and night flying, moved south to execute Japan’s first major radar-assisted nocturnal air-launched torpedo attack. The result was poor: US Navy ships made smoke for cover and manoeuvred radically to keep the Japanese astern even as the Japanese aircraft dropped flares to illuminate their targets. Eight Japanese aircraft were shot down by the ships' guns during the night, and three Mitsubishi G4M 'Betty' twin-engined medium bombers were claimed by night-fighters from Independence. The destroyer Pritchett suffered damage from friendly fire, but no damage from Japanese aircraft was incurred.

On 13 October the weather was worse than it had been on the previous day. Even though a wider array of targets was assigned to the task groups, from the Pescadores islands group to northern Luzon and Formosa, far fewer Japanese aircraft were encountered in the air. Results of the day’s operations were hard to ascertain as a result of the overcast. Pilots' reports from these two days of attacks helped uncover a larger network of air bases on Formosa than had previously been anticipated. This knowledge, combined with radio intercepts and the dusk attacks fended off the previous evening, led Mitscher to cancel any attacks scheduled to take-off after 14.00, and instead the task groups prepared to defend against another night assault.

As expected, elements of the T Attack Force returned to carry out twilight strikes against the US warships, on this occasion those of TG38.1 and TG38.4. The Japanese formations were spotted on radar at 16.40 and intercepted by the combat air patrols of TG38.4’s Belleau Wood one hour later. Belleau Wood's fighters routed the Japanese formation more than 70 miles (110 km) from the carrier force, destroying 10 fighters and bombers before returning to their ship. By 18.12, just before sunset, another formation of T Attack Force pilots was closing to within attacking range of the task groups. Six more warplanes were shot down in the vicinity of TG38.4 in just 20 minutes. A subsequent group of six G4M bombers which had penetrated the picket screen and evaded the combat air patrol made determined attacks on the carriers of TG38.4, putting four torpedoes in the water before all six were shot down by shipboard anti-aircraft guns. One torpedo ran just ahead of Franklin, and another ran too deep and therefore passed beneath the carrier. One of the bombers attempted to crash into Franklin on its way down, but glanced off the flightdeck and slid over the ship’s starboard edge into the water.

TG38.1 was not as lucky for 10 Yokosuka P1Y 'Frances' twin-engined attack bombers made contact with the group at 18.23 after eluding early radar detection by flying low over the water. Though visual contact was made and shipboard anti-aircraft fire destroyed six of the aircraft, one P1Y pressed home a determined torpedo attack on the carriers. The pilot was forced off course, missing his chance to torpedo a fleet carrier, but his torpedo struck the heavy cruiser Canberra, killing 23 of her crew and inflicting serious damage. Both engine rooms flooded and damage was done to the rudder. As a result, Canberra had to be taken in tow as part of a new task group, TG30.3, composed of ships detached from the carrier groups, and at about 22.00 the heavy cruiser Wichita began to tow the crippled cruiser to the south-east.

The task groups were forced to stay within Japanese air range longer than had been anticipated as a result of Canberra's situation. On 14 October, early morning fighter sweeps were launched to suppress Japanese air power on Luzon and Formosa while the newly formed task group attempted to escort Canberra to safety. Some air groups encountered Japanese warplanes in the attack zones, but no major air-to-air combat developed. Throughout the afternoon, Japanese aircraft flew to the perimeter of the task groups to relay sighting reports.

Another long night at general quarters was anticipated by the ships of TF38, and this was soon confirmed as sensible as TG38.1, TG38.2 and TG38.3 all suffered mass Japanese air attacks between roughly 15.00 and 18.30. TG38.2 was the first group to come under attack when a formation of 25 Yokosuka D4Y 'Judy' single-engined dive-bombers, using cloud cover to evade detection, was intercepted by the group’s combat air patrol. Only a few Japanese aircraft evaded the attentions of the US fighters, and these were able to put two bombs in the vicinity of the Hancock: one hit the forward port-side gun tub without detonating, so no serious damage was inflicted.

At about 17.00, a large formation of Japanese aircraft was spotted on radar as it headed toward TG38.3. As before, a great many of these attackers were shot down by combat air patrol fighters. The surviving Japanese aircraft descended to sea level to evade further radar detection, and these torpedo bombers and fighters successfully ambushed the formation just minutes later. Evasive manoeuvres, squally weather and poor Japanese fighter cover helped TG38.3 to avoid significant damage.

TG38.1 had been designated as cover for the retiring Canberra group. At 16.15 the light cruiser Houston joined TG38.1 to replace Wichita, which had been positioned to port off Wasp's bow before its reassignment as the towing ship. A large force of Japanese aircraft appeared after the sun had set at 18.31, and while anti-aircraft batteries of the group’s picket ships downed 10 aircraft as they attempted to close on the carriers, many more reached the centre of the group. At least two Japanese aircraft put torpedoes into the water in Houston's vicinity. The ship turned hard to starboard in an attempt to avoid the first torpedo wake that was seen. Although a second torpedo missed the ship to port, the first struck the cruiser amidships between the keel and the armour belt. Flooding in the engine rooms and other interior spaces caused the ship to take on a 16° list. Many of the ship’s crew had gone over the side of the wallowing vessel into the water. An order to abandon ship was almost given, but it was decided that the heavy cruiser Boston would tow the damaged Houston back to the east.

Although attacks on TG38.1 continued for hours after Houston had been hit, no further successes were scored by the Japanese aircraft.

Initially, the US operational order had called for the task groups to refuel on 15 October. Given the torpedoing of Houston and Canberra, however, only TG38.2 and TG38.3 departed to refuel. TG38.4 was reassigned to attacks on Luzon in order to keep Japanese attackers at bay while TG38.1 continued to function as escort for the group of damaged ships now nicknamed 'Crippled Division 1'. Faced with the decision either to scuttle or to protect the damaged cruisers, advisers to Halsey, commander of the 3^rd Fleet, convinced him to turn a bad situation into an opportunity. Unofficially dubbed the 'Bait Division', the slow-moving ships and their escorts were used as a lure to draw out the Japanese fleet. Urgent radio transmissions were broadcast on open channels in the hopes of Japanese interception. Based on sighting reports, it appeared that the plan might work: in the morning and evening, cruiser and battleship forces were reported heading to the south from Japan and to the south-east from Formosa.

Meanwhile, Japanese air attacks did not reduce in intensity despite the severe losses suffered by the Japanese over the preceding days. Rather than waiting for night raids, Japanese attack formations, escorted by A6M fighters, flew attacks on TG38.1 and TG38.4 from dawn to dusk, and the combat air patrols over TG38.4 had to be boosted with additional fighters to intercept incoming Japanese aircraft. About 25 Japanese attack and fighter planes were shot down between 10.45 and 10.56 hours by a combination of combat air patrol fighters and ships' guns. Fighters from the light carrier San Jacinto accounted for many more aircraft destroyed during the afternoon. Although Franklin took a glancing bomb hit during these battles, the damage proved superficial. Aircraft from TG38.4’s carriers also fought the Japanese over land. Air Group 13 from Franklin encountered a large group of Japanese aircraft on Nielson Field during the morning strikes against Luzon, and claimed at least 20 Japanese aircraft destroyed for the loss of just one Hellcat fighter.

Once again, it was TG38.1 which was subjected to the most concerted Japanese attacks. No offensive attacks were launched by the group’s aircraft, so the strength of the combat air patrols could be bolstered as much as possible. Fighting Squadron 14 aboard Wasp had claimed 30 Japanese aircraft shot down by the end of the day, and other carrierborne fighter groups in the task group downed more than 12 others. Some close bomb hits were recorded by the carriers, but no real damage was done to any US warship during these attacks.

During the morning and afternoon of 16 October, long-range searches were flown by TF38’s aircraft, for it was hoped that a Japanese surface fleet was heading toward the broadcast location of the 'Bait Division'. By the evening, however, it had become clear that Japanese reconnaissance aircraft had taken stock of the remaining US fleet strength, and no surface engagement developed from Halsey’s 'Lure of the Streamlined Bait'. Although no Japanese ships materialised, Japanese air attacks continued in force throughout the morning and into the afternoon. Dedicated air cover for TG30.3 was provided by light carriers Cowpens and Cabot, whose air groups intercepted numerous attackers. The largest strike, comprising 75 Japanese attack and fighter aircraft, arrived at about 13.30. One twin-engined aeroplane fought through the combat air patrol and ships' anti-aircraft batteries, surviving just long enough to put a torpedo in the water before itself crashing into the sea. The torpedo struck the after part of Houston's starboard side, blowing 20 men overboard and spreading petrol fires in the waters around the cruiser. Initially unsure whether the ship would hold together, the captain ordered the evacuation of 300 men as the ship’s condition was ascertained. In the end it was determined she would stay afloat and towing continued as before, slowly moving the task group towards the naval base at Ulithi atoll.

Surviving Japanese pilots returned with tales of a stunning victory, reporting that practically the whole 3^rd Fleet had been sunk and that the US carrier force had been left in shambles. Though some members of the Imperial Japanese navy’s higher command echelons were initially skeptical of such reports, this narrative was carried forward by members of the cabinet until it reached the Emperor Hirohito, who congratulated the navy and army for their success. Newspapers in particular trumpeted these claims, repeating that the US task force had been broken and was in retreat. Even those unconvinced members of the Imperial Japanese navy, up to and including Toyoda, believed some kind of victory had been achieved off Formosa.

In reality, the 'Battle of Formosa' represented a rout of Japanese air forces and a turning point for future naval operations. Upon realising the scale of the Japanese defeat suffered on 12 October alone, Fukudome lamented that 'Our fighters were nothing but so many eggs thrown at the stone wall of the indomitable enemy formation.'

In response to the US attacks on Formosa from 12 October, newly formed Japanese carrier units such as the 634^th Kokutai (flotilla) were detached from their ships in the 4^th Carrier Division. Posted to the land-based 2^nd Air Fleet, the 634^th Kokutai now underwent rapid attrition throughout the remainder of the month. By January 1945 this group had no personnel capable of maintaining flight operations. At the same time, older carrier units such as the 653^rd Kokutai, which had just finished rebuilding after losses suffered during the 'Battle of the Philippine Sea', were detached and similarly integrated into the 2^nd Air Fleet. Over the course of the 'Battle of Formosa' alone, the 653^rd Kokutai lost almost half of its available aircraft.

Between the aforementioned carrier air group losses, which deprived Ozawa’s ships of their pilots, and losses of experienced land-based attack units like the T Attack Force, there remained no real Japanese prospect of providing air cover over the Japanese fleet in the forthcoming 'Battle of Leyte Gulf'. Both historians of the battle and Imperial Japanese navy commanders have acknowledged this factor as the primary reason for the 'Sho' plan’s failure.

The 'Battle of Formosa' also proved to mark a turning point in Japanese military tactics. Organised kamikaze attacks had been proposed after the 'Battle of the Philippine Sea' but rejected by Imperial Japanese navy leaders throughout September 1944. Only in the immediate wake of the 'Battle of Formosa', when Vice Admiral Takijiro Onishi replaced Vice Admiral Kimpei Teraoka as commander of the 1^st Air Fleet, were units specifically deployed with the intent to crash-dive onto US vessels.