The Culper Ring was an American spy network of The American Revolutionary War. It was organized by Major Benjamin Tallmadge (alias "John Bolton") on the orders of George Washington in 1778 as a way to keep tabs on what the sizable British forces of New York City were up to. General Sir Henry Clinton's headquarters were in New York as well. Monitoring of the comings and goings from this location uncovered many British agents, allowing them to be eliminated or intentionally misinformed.
The Ring gained its name from the aliases adopted by two of its most important members, Abraham Woodhull and Robert Townsend (Samuel Culper Sr. and Samuel Culper, Jr., respectively).
Townsend was a spymaster's dream. He was intelligent, wealthy, influential, well-placed, and considered a Loyalist beyond suspicion. Further, his sterling reputation allayed suspicion from his less-trusted associates. His movements about the city were not restricted, which not only allowed him to observe conditions all over, but also to gather and pass information from those whose movements were monitored or restricted.
Townsend used convoluted courier routes, invisible ink, and ciphers in his communiques. Only he, Washington, Tallmadge, and Woodhull knew the codes. Townsend's messages would be routed to a farmer, named Austin Roe, who had cause and authorisation to regularly cross the East River. There he would ride to Setauket to pass the messages to Woodhull. From there, Caleb Brewster, a sailor, would sail to the Connecticut shore, at Fairfield where Tallmadge would take possession of the communiques, hence to Washington.
In 1780, the Ring scored its greatest victory, a deception similar in impact and method as Operation Bodyguard, which lead to the success of Operation: Overlord (aka D-Day) and thus Allied victory in WWII. It may have well won the war.
A French army had landed at Newport, Rhode Island. It was to assist General Washington's forces. General Clinton, upon learning of this, began to mobilise his troops for an attack to prevent the potentially disasterous union. Townsend observed the Redcoats massing at the docks and preparations being made for a campaign.
Fake plans for an assault on New York by an American Army were drawn up. These plans were made to fall into the hands of a known Loyalist spy, who duly passed them on to Clinton's HQ. Clinton cancelled the attack, and fortified the city in anticipation of the spurious onslaught.
In 1781, James Rivington (who, in his capacity as The King's Printer, rained down scorn upon the Revolutionaries in his newspapers, whilst simultaneously being a primary source of information for Townsend) mananged to obtain a copy of The Royal Navy's signalbook, an invaluable piece of intelligence. This helped a French fleet greatly in its defense against a British attempt to reenforce General Cornwallis at Yorktown.
The Culper Ring was enormously sucessful throughout the war, gaining intelligence victories both large and small, and operating throughout the entire theatre. Many of its agents posed as Loyalists, incurring the wrath of their friends, families, and colleagues. Some were captured and executed or imprisioned. One such imprisioned agent, Lt. Lewis J. Costigin, actually made his most valuable contributions while held prisoner. He had been captured, and pledged to not escape or provide information to the Continentalists in exchange for a parole. He wandered New York City in his American Army uniform, waiting for his turn to take part in a prisoner exchange. He was freed of his oath and put up for exchange in September of 1778, but did not actually leave the city until January of 1779. He posed as a prisoner yet to be paroled and continued to collect intelligence in plain sight. He made good use the time afforded by this oversight.
A fortuitous combination of trusted, high-level agents already being in place at the outbreak of war, advanced (at the time) ciphers and codes, dedicated agents, and British counter-intelligence failures made the Culper Ring one of the most effective and sucessful spy networks ever, and instrumental to the victory of the Continentals.
It was (supposedly) disbanded at the conlusion of the war, in 1783.
A personal note: I first heard about The Culper Ring from the comic book "Y: The Last Man". In which the ring is posited to still exist. I have been unable to uncover any evidence that indicates that the official history is wrong, but you never know. One neat touch in the comic is the presence of Agent 355*, who is named after a female agent of the real Culper Ring. She was found out by Benedict Arnold after his betrayal, and died in prison for her espionage activities.
*"355" was the Ring's code for "Lady".
This writeup is in the public domain.
Sources:
http://www.angelfire.com/dc/1spy/Culper.html
http://www.angelfire.com/dc/1spy/Arnold.html#Culper
http://www.americanrevolution.com/MartyrsandHeroes.htm
The OED