Following the war, Barbey was stationed in Wales and Turkey before returning to sea duty in 1922. Between 1928 and 1931, he served as an administrator at the Naval Academy. Promoted to commander in 1933, Barbey held various positions before being assigned to the War Plans Section of the Bureau of Navigation in 1937. There, he worked on developing mobilization strategies. He also became fascinated with amphibious warfare, a subject that had been little studied since World War I. In February 1940, Barbey was promoted to captain and took command of the battleship New York.
In January 1941, he became the chief of staff to Rear Admiral Randall Jacobs of the Service Force and Amphibious Force, Atlantic Fleet. He was promoted to rear admiral in June 1942 while on the staff of Chief of Naval Operations Admiral Ernest King. In this capacity, he founded the Amphibious Warfare Section of the U.S. Navy and worked to establish doctrine and tactics, as well as to secure equipment better suited to amphibious operations. Under his leadership, the DUKW amphibious truck was developed, along with other new landing craft designs.
In January 1943, Barbey became commander of the Amphibious Force, Seventh Fleet, setting up his headquarters at Port Stevens, Australia. Working under General Douglas MacArthur from 1943 until the summer of 1945, he commanded 56 amphibious landings in support of various invasions, including those of New Guinea, the Philippines, and Borneo.
Promoted to vice admiral in December 1944, Barbey was the ranking naval subordinate to MacArthur in the southwest Pacific. After the war, he held various positions, including commander of the Seventh Fleet, commander of the Atlantic Amphibious Forces, commander of the Fourth Fleet, and chairman of the Joint Military Board. From March 1947 until September 1950, he commanded U.S. naval forces in the Caribbean. Barbey retired from the navy in June 1951. He died at Bremerton, Washington, on 11 March 1969.
Barbey, Daniel Edward. MacArthur's Amphibious Navy: Seventh Amphibious Force Operations, 1943–1945. Annapolis, MD: Naval Institute Press, 1969.; Morison, Samuel Eliot. History of United States Naval Operations in World War II. Vol. 5, The Struggle for Guadalcanal, August 1942–February 1943. Boston: Little, Brown, 1949.; Morison, Samuel Eliot. History of United States Naval Operations in World War II. Vol. 13, The Liberation of the Philippines: Luzon, Minadanao, the Visayas, 1944–1945. Boston: Little, Brown, 1953.