During early days of the Civil War, Wood helped organize, train, and equip several volunteer regiments in Indiana. In October 1861, he was promoted to brigadier general of Indiana volunteers. The following month, he married Caroline E. Greer of Dayton, Ohio. Wood commanded a brigade in the Tennessee and Mississippi campaigns at the beginning of the war. He commanded a division in the Army of the Ohio, then in the Army of the Cumberland. Wood was present at the second day of the Battle of Shiloh. Wood was wounded during the Battle of Murfreesboro in December 1862. He suffered controversy at the Battle of Chickamauga, where he was blamed for contributing to William S. Rosecrans's defeat. On September 20, 1863, a breakdown in situational awareness by Rosecrans and poor staff work resulted in Wood receiving a seemingly senseless order that, if literally obeyed, required him to pull his division out of the line to the support of another division further to his left, dangerously creating an unprotected gap in the right of the line. Instead of verifying his commander's actual intent, Wood elected to regard the order as imperative and moved his division out of its position. Historian Peter Cozzens wrote: Less than 30 minutes after Wood moved his division, Confederate Lt. Gen. James Longstreet's men poured through the resulting gap and cut Rosecrans's army in two. Rosecrans was eventually relieved from command of the Army of the Cumberland following this Union defeat, while Wood retained his division. Cozzens finds fault with Wood "for letting petty bitterness get the better of him" and Rosecrans for "not checking the order to make sure it reflected his intent. Rosey was tired and it showed." Wood redeemed himself during the successful assault on Missionary Ridge in November and at the Battle of Lovejoy's Station on August 20, 1864, where despite a badly shattered leg, he stayed on the field encouraging his men. He commanded the IV Corps of the Army of the Cumberland at the Battle of Nashville, and pursued John Bell Hood's Confederates after the Union victory. President Abraham Lincoln appointed Wood to the grade of major general of volunteers on February 22, 1865, to rank from January 27, 1865. On February 14, 1865, the U.S. Senate had confirmed the President's January 30, 1865 nomination of Wood's appointment. Wood was mustered out of the volunteers on September 1, 1866.
Postbellum career
After the Confederates surrendered, Wood was assigned to duty in Mississippi with the occupation army. Frustrated with administrative duty with the Freedmen's Bureau and the politics of Reconstruction, he retired from the service in June 1868, having achieved the same rank in the regular army. His old war wounds prevented him from achieving his desire of returning to active duty on the frontier. He moved to Dayton and became active in the Grand Army of the Republic, a social organization for Union Army veterans. He also served as a member of the board of visitors at the Military Academy and was a companion of the Military Order of the Loyal Legion of the United States. In 1892 he became a Veteran Member of the Aztec Club of 1847. When he died in 1906, Wood was the last survivor of his West Point class.