Waddell continued his military service with the Indian Medical Service. He was in China during the Boxer Rebellion (1898–1901), including the Relief of Peking in August 1900, for which he was mentioned in despatches, received the China War Medal (1900) with clasp, and was in 1901 appointed a Companion of the Order of the Indian Empire (CIE). By late 1901 he had moved to North-West Frontier Province and was present during the Mahsud-Waziri Blockade, 1901–1902. He was in Malakand in 1902 and took part in the Tibet Mission to Lhasa 1903–04, for which he was again mentioned in despatches, received a medal with clasp and was appointed a Companion of the Order of the Bath (CB). Waddell then returned to England, where he briefly became Professor of Tibetan at the University College of London (1906–1908).