This deserves some context. When Jefferson ran for office, many of his opponents were people who wanted religion to play a bigger role in government. These opponents often made false accusations about Jefferson including calling him an Atheist. They repeatedly tried to turn public opinion against him with these falsehoods.

Jeffersons friend Benjamin Rush tried to warn Jefferson about this and told him about what was being said about him and that he should do something about this. Jefferson replied with the following:

I have a view of the subject which ought to displease neither the rational Christian nor Deists, and would reconcile many to a character they have too hastily rejected. I do not know that it would reconcile the genus irritabile vatum who are all in arms against me. Their hostility is on too interesting ground to be softened. The delusion into which the X. Y. Z. plot shewed it possible to push the people; the successful experiment made under the prevalence of that delusion on the clause of the constitution, which, while it secured the freedom of the press, covered also the freedom of religion, had given to the clergy a very favorite hope of obtaining an establishment of a particular form of Christianity thro' the U. S.; and as every sect believes its own form the true one, every one perhaps hoped for his own, but especially the Episcopalians & Congregationalists. The returning good sense of our country threatens abortion to their hopes, & they believe that any portion of power confided to me, will be exerted in opposition to their schemes. And they believe rightly; for I have sworn upon the altar of god, eternal hostility against every form of tyranny over the mind of man.