In April 1862 at the Battle of Shiloh in Western Tennessee, Holtzclaw was seriously wounded in his right lung during the first day of fighting. He was initially thought to have been mortally wounded, but made an amazing recovery and was back in his duties after only ninety days. He was promoted to colonel and served for a time in Montgomery. In 1863, he was again wounded, this time when he was thrown from his horse during the Battle of Chickamauga in northern Georgia. However, the injury was not serious enough to force him from the field. In November 1863, he assumed command of a brigade in Stewart's Division in Second Corps of the Army of Tennessee and led it during the Chattanooga Campaign, including the Battle of Lookout Mountain. For a time, he temporarily led the brigade of Henry Clayton.