In July 1863, Powell was shot while leading cavalry in Wytheville, Virginia. Although surgeons on both sides of the conflict believed his wound was fatal, Powell survived—and became a prisoner of war. He was later exchanged, and returned to his command of the 2nd West Virginia Volunteer Cavalry Regiment. In 1864, Powell commanded brigades while fighting mostly in the Shenandoah Valley under the direct supervision of General William W. Averell in an army commanded by General Philip Sheridan. Eventually, Powell replaced Averell as division commander. Powell led cavalry in numerous battles, including Moorefield, Opequon, and Fisher's Hill. He resigned as a brigadier general in January 1865 to tend to family health issues. He was later brevetted to major general. Powell returned to his original profession working in the iron making industry, and was active in the Grand Army of the Republic, a fraternal organization of Union veterans of the American Civil War.