In 1959, Queen Elizabeth II appointed Gibbs as Governor of Southern Rhodesia and appointed him a Knight Commander of the Order of St Michael and St George in 1960. The Unilateral Declaration of Independence by the Rhodesian Front government in November 1965 placed Gibbs in a very difficult position. He was intensely loyal to Rhodesia, and was a close friend of Ian Smith, but he was also equally loyal to his office as the Queen's viceroy. While understanding what had made Smith's government declare the UDI, Gibbs decided that final legality rested with the Crown, not Smith and his government. By the time Smith and Deputy Prime MinisterClifford Dupont called on Governor Gibbs after the UDI was signed, Whitehall had directed Gibbs to use his reserve power to dismiss Smith and his entire cabinet from office. Gibbs complied with the order without hesitation. He declared that by issuing the UDI, the Government of Southern Rhodesia, as Britain still seen it, had committed an act of treason. However, Smith and his ministers simply ignored the dismissal, advising Gibbs that "in view of the new constitution…, he no longer has any executive powers in Rhodesia"—and therefore, his power to sack them no longer existed.
Under siege
Several high-ranking officers of the Rhodesian military went to Governor Gibbs earlier in the day, made a statement of loyalty to him, and asked Gibbs to issue a warrant so that they could arrest Smith and Dupont. However, Gibbs knew that the bulk of the officer corps, as well as the rank and file of the Rhodesian military, were solidly behind Smith's government and that such a move would lead to a coup d'état. Gibbs announced that despite the UDI, he had no intention of resigning his office or leaving Rhodesia, and that therefore, he would remain in Government House in Salisbury as the sole legal representative of Queen Elizabeth II. With few exceptions, the international community continued to recognise him as the Queen's sole legitimate representative—and thus, the only lawful authority in what London maintained was still the colony of Southern Rhodesia. In response, Smith declared that Government House was only "temporarily occupied" by Gibbs "in a personal capacity", and would be occupied by Dupont once it became available. This action led to four years of harassment and petty afflictions by the Rhodesian government, resulting in making Gibbs and his wife virtually prisoners in Government House, by cutting off his telephone, electricity and water. It also took away his ceremonial guard and official cars, and sent him bills for the rent of Government House, which he refused to pay. However, his supporters set up a Governor's Fund to pay for the upkeep of the building, and with the assistance of a small staff, led by Sir John Pestell, he managed to remain defiant. While Gibbs continued to occupy Government House, Dupont and his wife held official receptions at Governor's Lodge in the Salisbury suburb of Highlands. This had previously been used by Gibbs when Southern Rhodesia was part of the Federation of Rhodesia and Nyasaland. During this time, Government House had been the residence of the Governor-General of the Federation. In 1967, on the second anniversary of UDI, Gibbs declared that his visitors' book would be open to all those who wished to show their loyalty to The Queen, while Dupont, in response, announced that the visitors' book at his office, on the same street, would be open to all those who wished to show their support for UDI. In June 1969, Gibbs resigned after Smith's government held and won a referendum that year making Rhodesia a republic. He remained in Rhodesia and lived the rest of his life on his farm between 1970 and 1983, and latterly in Harare from 1983 until his death in 1990. He was appointed to Her Majesty's Most Honourable Privy Council and was made a Knight Grand Cross of the Royal Victorian Order by Queen Elizabeth II. He died in Harare on 5 November 1990.