In 1948 Lotz married an Israeli Jew, Rivka, and they had a son, Oded Gur-Arie. At the outbreak of the Independence War in 1948 Lotz joined the newly formed Israel Defense Forces and served with the rank of Captain. He took part in the battle around Latrun. At the end of the war in 1949, Lotz held the rank of major. During the Sinai War in 1956, when Israel, the United Kingdom, and France attacked Egypt, Lotz rose to the rank of Major and commanded an Infantry brigade.