On 26 April 1798, Gyulay became Oberst of the newly formed Infantry Regiment # 48. In the War of the Second Coalition, his troops drove off French attacks in the Battle of Verona on 26 April 1799. At the Battle of Magnano on 6 April, his regiment formed part of Ferdinand Minckwitz's brigade in Konrad Valentin von Kaim's division. While leading an attacking column against Antoine Delmas' French division, he was struck in the head by a musket ball. The bullet was removed by trepanning at Verona, but the dangerous injury forced Gyulay to retire from the army the next year. He was appointed General-Major on 24 July 1800.