In July 1939, Steele was posted to the mobilization branch of the War Office Staff. He signed the executive signal for the mobilization of the army. He was promoted to brigadier on 8 November 1939 and took over command of the 132nd Infantry Brigade in November 1939. He served in France and Belgium in 1940 and was awarded the Distinguished Service Order (DSO) for his part in the engagement on the River Escaut and the subsequent withdrawal to Dunkirk.