On October 8, 1862, Jones was promoted to the rank of colonel and transferred to the 154th New York Volunteers, or the "Hardtack regiment", then under command by his former law partner Colonel Addison Rice. Rice had founded the regiment and, within two months of its arrival in Northern Virginia, he turned over his command to Jones. The 154th was part of General Oliver O. Howard's XI Corps during the Battle of Chancellorsville, attached to the 1st Brigade of the 2nd Division commanded by Brigadier General Adolph von Steinwehr, where Jones was wounded in the right hip when his unit was ambushed and overrun by Confederate troops under Thomas "Stonewall" Jackson resulting in his capture. Jones remained a prisoner-of-war for five months until being released in a prisoner exchange in October 1863; other accounts claim he was paroled for medical reasons on May 15 and again hospitalized in Washington during June where had an attack of amaurosis two months later. After his release from hospital in Annapolis, Maryland, Jones was placed in charge of paroled prisoners before returning to active duty and accompanied the XI Corps upon being transferred to Tennessee. The unit was present at Chattanooga during the assault on Missionary Ridge the next month, however they did not participate in the battle.