Five months after beating Bell, Teddy defended his world title against Willie Smith of South Africa, but was soundly outpointed. Down in the eighth, he did well to survive the distance. Despite challenging the South African to a return, with a side-stake of £1,000, Baldock did not get the chance to regain his laurels.
Although he eased back with wins over Len Fowler and Phil Lolosky. Teddy was not the same fighter. The flashing left hand, which had won him most of his fights in the past, was now giving him trouble. He damaged it when knocking out Fowler, but after a real war with Lolosky, further damage put him out of action for five months. When he did return to the ring in July, 1928, Teddy knocked out Pierre Calloir of France in four rounds, and three weeks later stopped Bugler Harry Lake in five rounds, before a crowd of 8,000 at Blackpool Race Course, amid pouring rain.

Joe Morris, meanwhile, was planning a big show at the Clapton Orient Football Ground, with British flyweight champion Johnny Hill topping the bill against the American Newsboy Brown. In the chief supporting contest he matched Baldock with Johnny Brown, the St. George's bantam, for the national eight stone-six title. Before a crowd of 30,000, Baldock hit Brown at will before the corner threw in the towel during the second round.
Despite his claim to the British title, Teddy was yet again not recognised as champion, because the fight had not been staged at the National Sporting Club. It was further claimed that Brown had, in fact, forfeited the title because almost three years had elapsed since he last defended it. The Club therefore recognised Alf "Kid" Pattenden as champion, following his victory over George "Kid" Nicholson in June, I928. Although he was disappointed, Baldock continued along his winning way by stopping Mick Hill (Tooting), at "The Ring", Blackfriars, and three weeks later he met Phil Lolosky in an eagerly-awaited return at the Albert Hall. Although he knocked out Lolosky in three rounds, Teddy again badly damaged his left hand. He was examined by a Harley Street specialist, who diagnosed a fracture of the left metacarpal in three places. An operation was carried out, and Teddy was out of the ring for a further five months.

Meanwhile, intense rivalry had built up in the East End between fans of Baldock and those of Alf Pattenden, of Bethnal Green. Both men claimed the British bantamweight title, and the matter was in urgent need of settlement. It was, in fact, shortly after the formation of the British Boxing Board of Control, in 1929, that the two men were matched for the undisputed championship.

The fight took place at Olympia on 16 May, 1929, with a Lonsdale Belt at stake. It was later described as one of the greatest battles ever seen in a British ring. For round after round, the two little men pounded each other, with neither prepared to give way, Pattenden was hit with hooks, uppercuts, and jabs from both hands, and smashes to the chin which would have floored many bigger men. His face cut and smeared with blood, Alf was made of steel, and came back time and again. It was amazing that the fight went the distance, and at the final bell the pair fell into each other's arms. They had given everything, and although each man was only 22, there can be no doubt that this fight finished both of them. Baldock got the decision, but the cheering of the crowd, which lasted for several minutes, was for both men. Afterwards, Teddy described Alf as boxing's gamest loser.
After two months' rest, Baldock faced Gideon Potteau of Belgium at the Blackpool Football Ground, during August Bank Holiday weekend, before a crowd of over 10,000 When he scored a knockdown in the opening round, Teddy looked set for an early night, but then the effects of the very hard Pattenden fight were clear. Baldock struggled, and it was the eleventh round before the Belgian surrendered.

Meanwhile, Teddy received an offer from America of £2,000, or 17.5 % of the gate receipts, to meet "Panama" Al Brown, for the world title. (This boxer was known in the States by his prefix because another Al Brown was campaigning in the USA at the same time, but in Britain and in Europe the national designation was rarely used.) The fight was set for 17 September, 1929, and Baldock and his party travelled to the States and commenced training. The occasion was then postponed for two weeks, because Brown wasn't ready. Then, with just a few days to go, the lean and lanky black Panamanian asked for another postponement owing to stomach problems. Teddy was continually being messed around, and in the end his patience was exhausted and he returned home.
He was back in action in January, 1930, and beat Emile Pladner of France, who was disqualified in the sixth for a terrible low blow, which left the Poplar boy rolling in agony on the floor. Good victories over Charlie Rowbotham (rsf 11), Lew Pinkus, (points), and Jimmy Docherty (KO 6), followed, but although Teddy had won fourteen in a row, the fights were getting fewer. There were further negotiations for him to meet "Panama" Al Brown, but these fell through when Joe Morris insisted on getting £500 appearance money up front.

Clear evidence that Baldock was declining came when he dropped a points decision to Benny Sharkey at Newcastle in September, 1930 Apart from problems with his hands, he was also having difficulty making the bantamweight limit.