He first saw action at the battle of Big Bethel, where he was defeated. He then commanded Fort Monroe, where Butler became the first to identify slaves who ran away into Union lines as "contraband of war, " despite the Fugitive Slave Act of 1850. In August of 1861, Butler led a successful amphibious assault on the Hatteras Inlet in North Carolina, and moved onto New Orleans in May, after the city had already surrendered to Admiral David G.
It was during this time that Butler would gain many of his enemies. Once in New Orleans, he was appointed as military governor, and commanded the city in rather controversial ways. Although he was able to bring order to the city, he became known as one who would pilfer goods of the Southern households he was watching. He issued Order 28 during this time period, which stated that any lady in New Orleans who showed contempt for Union soldiers would effectively be treated as though they were a prostitute. This law drew great controversy in both the North and South, caused Confederate president Jefferson Davis to label Butler an outlaw, and earned him the nickname Beast Butler.
He was removed from this position in December of 1862, and given command of the Department of Virginia and North Carolina in November of 1863, which would become known as the Army of the James. While commanding this force, he performed poorly during.