After the royal family's unsuccessful effort to flee, Lafayette's fortunes declined

For the next year, Lafayette’s popularity and influence were at their height. He supported measures that transferred power from the aristocracy to the bourgeoisie, but he feared that further democratization would encourage the lower classes to attack property rights. On June 20, 1791, the royal family fled to Austria after becoming captives in their palace as a result of the French government's rising radicalism. Although they were apprehended by the National Guard in Varennes, the government-held Lafayette responsible for their first escape. Lafayette also had a stronger distaste for the revolution's radicalism. In particular, his support for the rule of law diverged more and more from the revolution's crowd mentality.

The Jacobin club planned a rally on July 17 on the Champ-de-Mars square to overthrow the king and establish a republic. Lafayette and Bailly arrived with soldiers and gave the order for the throng to disperse. The demonstrators disobeyed, made fun of, and assaulted with stones and bricks. The Guardsmen retaliated by firing cannon volleys into the air. When a gunshot was fired at La Fayette from among the crowd, chaos broke out. Bailly instructed the soldiers to fire. The Champs de Mars Massacre claimed the lives of about 50 petitioners. In retaliation, the mob broke into Lafayette's home and threatened his wife. His reputation was severely tarnished as a result of the incident, and he left the guard in October.