On 1 September 1918, Towner was in command of No. 3 Section of the 7th Machine Gun Company during an attack on Mont St. Quentin, near Péronne. Armed with four Vickers machine guns, the section was attached to the right flank of the 24th Australian Infantry Battalion, whose principal objective was to seize the summit of Mont St. Quentin. To accomplish this, the battalion would have to advance through the village of Feuillaucourt before moving down to the Péronne road. The Australians began their advance at 06:00 behind an artillery screen, with Towner's section covering a front of 1,400 metres (1,500 yd). Visibility was limited by rain, and Australian casualties soon began to mount. Locating a German machine gun that was causing heavy losses among the advancing troops, Towner rushed the position and single-handedly killed the crew with his revolver. Having captured the gun, he then turned it on the Germans.
Once Feuillaucourt had fallen, the 24th Battalion continued to the Péronne road. However, the Germans had occupied a copse of trees and put up strong resistance, halting the advance. German troops were observed massing for a counter-attack, so Towner moved forward with several of his men, two Vickers guns, and the captured German gun, and brought the assembling Germans under concentrated fire, inflicting many casualties. Attempting to retire, a party of twenty-five German soldiers were cut off by Towner's guns and taken prisoner. Underr heavy incoming fire, Towner then scouted over open terrain to locate advantageous positions from which his guns could offer further support. When he moved his section forward, the machine gunners were able to engage more groups of German soldiers; their aggressive action enabled the advance to be renewed, and the battalion attained the cover of a sunken section of the Péronne road. However, on rejoining them Towner found that his section was growing short of ammunition, so he made his way back across the fire-swept ground and located a German machine gun, which he brought forward along with several boxes of ammunition. This he brought into action "in full view of the enemy"; his effective fire forced the Germans to retire further, and allowed one of the stalled Australian flanks to push ahead.
German machine gunners had occupied a commanding vantage overlooking the sunken road, and began to rain down heavy fire around Towner's position. One of the bullets struck his helmet, inflicting a gaping wound to his scalp. Refusing to be evacuated for medical treatment, Towner continued firing his gun as the German pressure increased and the situation grew critical. Eventually the Australian infantry were forced to retire a short distance, but with all its crew having become casualties, one gun was left behind. Alone, Towner dashed out over no man's land and retrieved the weapon. With this gun he "continued to engage the enemy whenever they appeared", putting a German machine gun out of action with his accurate fire.
Throughout the night, Towner frequented the front lines and "continued to fight and ... inspire his men". He provided supporting fire for the 21st Australian Infantry Battalion as they assaulted a heavily fortified crater on Mont St. Quentin's summit, and repeatedly reconnoitred the German position to reported on troop movements. The next morning his section assisted in repulsing a large German counterattack before Towner was finally evacuated with exhaustion—thirty hours after being wounded. Initially admitted to the 41st Casualty Clearing Station, he was transported by train to the 2nd Red Cross Hospital at Rouen. For his actions during the battle, Towner was awarded the Victoria Cross—the third of six Australians to receive the medal during the fighting around Mont St. Quentin and Péronne.
The full citation for Towner's Victoria Cross appeared in a supplement to the London Gazette on 14 December 1918, reading:
War Officer, 14th December, 1918.
His Majesty the KING has been graciously pleased to approve of the award of the Victoria Cross to the undermentioned Officers, Warrant Officer, Non-commissioned Officers and Men: —
Lt. Edgar Thomas Towner, M.C., 2nd Bn., Aus. M.G. Corps.
For most conspicuous bravery, initiative and devotion to duty on 1st September, 1918, in the attack on Mont St. Quentin, near Peronne, when in charge of four Vickers guns. During the early stages of the advance he located and captured, single-handed, an enemy machine-gun which was causing casualties, and by turning it on the enemy inflicted severe losses.
Subsequently, by the skilful, tactical handling of his guns, he cut off and captured twenty-five of the enemy.
Later, by fearless reconnaissance under heavy fire, and by the energy, foresight and promptitude with which he brought fire to bear on various enemy groups, he gave valuable support to the infantry advance.
Again, when short of ammunition, he secured an enemy machine-gun, which he mounted and fired in full view of the enemy, causing the enemy to retire further, and enabling our infantry to advance. Under intense fire, although wounded, he maintained the fire of this gun at a very critical period.
During the following night he steadied and gave valuable support to a small detached post, and by his coolness and cheerfulness inspirited the men in a great degree.
Throughout the night he kept close watch by personal reconnaissance on the enemy movements, and was evacuated exhausted thirty hours after being wounded.
The valour and resourcefulness of Lt. Towner undoubtedly saved a very critical situation, and contributed largely to the success of the attack.