After the fall of Vicksburg, Osterhaus's division was transferred to Tennessee. In the Chattanooga Campaign he aided Maj. Gen. Joseph Hooker in the capture of Lookout Mountain. Osterhaus then participated in the Atlanta Campaign but a month-long sick leave caused him to miss the crucial Battle of Atlanta. However, he returned to command and played a significant role in the Battle of Jonesborough. After the capture of Atlanta, he received command of the XV Corps, one of the four corps into which the army was consolidated, in the Sherman's March to the Sea. In March 1865 Osterhaus was appointed chief of staff in the Military Division of West Mississippi under the command of Maj. Gen. Edward Canby, a commander with little combat experience in high command. Osterhaus served Canby through the battles of Spanish Fort and Fort Blakely. When Edmund Kirby Smith surrendered the Confederate forces in the Trans-Mississippi Theater, Osterhaus was sent as Canby's representative and therefore personally signed the documents on behalf of the Union army.