McDowell was promoted to brigadier general in the regular army on May 14, 1861, and given command of the Army of Northeastern Virginia, despite never having commanded troops in combat. The promotion was partly because of the influence of his mentor, Treasury Secretary Salmon P. Chase. Although McDowell knew that his troops were inexperienced and unready, and protested that he was a supply officer, not a field commander, pressure from the Washington politicians forced him to launch a premature offensive against Confederate forces in Northern Virginia. His strategy during the First Battle of Bull Run was imaginative but ambitiously complex, and his troops were not experienced enough to carry it out effectively, resulting in an embarrassing rout.
After the defeat at Bull Run, Maj. Gen. George B. McClellan was placed in command of the new Union Army defending Washington, the Army of the Potomac. McDowell commanded a division in the new army, but McClellan soon reorganized his command and McDowell was given I Corps the following spring. His corps stayed behind to defend Washington, and was eventually supposed to march to McClellan's support while the latter fought in the Peninsula Campaign; however, the nervous politicians who feared that General Thomas J. "Stonewall" Jackson's Valley Campaign would eventually include an attack on Washington kept McDowell's 40,000 soldiers behind.
Eventually, the three independent commands of Generals McDowell, John C. Frémont, and Nathaniel P. Banks were combined into Maj. Gen. John Pope's Army of Virginia and McDowell led the III Corps of that army. Because of his actions at Cedar Mountain, McDowell was eventually brevetted major general in the regular army; however, he was blamed for the subsequent disaster at Second Bull Run. He escaped culpability by testifying against Maj. Gen. Fitz John Porter, whom Pope court-martialed for alleged insubordination in that battle. Despite his formal escape, McDowell spent the following two years in effective exile from the leadership of the Army.
Later service and postbellum career
In July 1864, McDowell was given command of the Department of the Pacific. He later commanded the Department of California from July 27, 1865 to March 31, 1868, briefly commanded the Fourth Military Department, then commanded the Department of the East from July 16, 1868 - December 16, 1872. On November 25, 1872, he was promoted to major-general. On December 16, 1872, McDowell succeeded General George G. Meade as commander of the Military Division of the South, and remained until June 30, 1876. From July 1, 1876 to his retirement on October 15, 1882, he was commander of the Division of the Pacific.
In 1879, when a Board of Review commissioned by President Rutherford B. Hayes issued its report recommending a pardon for Fitz John Porter, it attributed much of the loss of the Second Battle of Bull Run to McDowell. In the report he was depicted as indecisive, uncommunicative, and inept, repeatedly failing to answer Porter's requests for information, failing to forward intelligence of Longstreet's positioning to Pope, and neglecting to take command of the left wing of the Union Army as was his duty under the Articles of War.
Following his retirement from the army in 1882, General McDowell exercised his fondness for landscape gardening, serving as Park Commissioner of San Francisco, California until his death on May 4, 1885. In this capacity he constructed a park in the neglected reservation of the Presidio laying out drives that commanded views of the Golden Gate. He is buried in San Francisco National Cemetery in the Presidio of San Francisco.