Stegman was wounded in regiment's first battle on August 9, 1862, the Battle of Cedar Mountain. As the leftmost unit during the Union advance on the southern portion of the battlefield, the 102nd New York was exposed to Confederate artillery fire. A shell exploded near Stegman and a fragment struck him in the head. Nevertheless, Stegman refused to sit out the Battle of Antietam the following month and went into action with a bandage on his head. He remained in command of Company E throughout the rest of 1862 and into 1863, leading it in the battles of Chancellorsville and Gettysburg. In the latter engagement, Stegman took command of the regiment when Col. James C. Lane was wounded.