Kelly was commissioned in January 1862, and later seconded to the staff of Major General George Henry Thomas (later "The Rock of Chickamauga") of the XIV Corps, United States Army of the Cumberland, as a Signal Officer. He was promoted to Captain on 17 March 1863, becoming Chief Signal Officer. During this period his regimental commander requested his reassignment back to the 10th Ohio, in order that he might take command of one of the regiment's manoeuvre battalions. General Thomas refused the request, writing that he could not spare Kelly from his duties. On 30 April 1863, Kelly was administratively transferred, on the books of the 10th Ohio from Company "C" to Company "I", while continuing to serve at XIV Corps Headquarters. General Thomas's need for Kelly's services was trumped by a new Army regulation requiring that all officers of the Signal Corps have university degrees by the following February. This being the case (although too late for battalion command), Kelly again requested transfer back to his regiment. On 19 August 1863 he was ordered to return to the "Bloody Tenth" as Captain, Company "I", from which he was mustered out with the rest of the 10th Ohio on 17 June 1864.