McLoughlin was in Britain during the War of Independence, but returned to Ireland in 1922. In line with the CPI's strategy, he joined the Irish Republican Army (IRA) to fight on the anti-treaty side in the Civil War, and was given command of a column in County Cork. He was captured in December, and sentenced to death, but he was not executed and, indeed, was released in October 1923. He initially returned to work with the CPI, but this soon disbanded. McLoughlin then began working with Jim Larkin, but disapproved of Larkin's handling of an unsuccessful railway strike and decided to relocate to England.