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Miles was working as a crockery store clerk in Boston when the Civil War began. He entered the Union Army on September 9, 1861, as a volunteer and fought in many crucial battles.
He became a Lieutenant in the 22nd Regiment Massachusetts Volunteer Infantry, and was commissioned Lieutenant Colonel of the 61st New York Volunteer Infantry Regiment on May 31, 1862. He was promoted to Colonel after the Battle of Antietam. Other battles he participated in include Fredericksburg, Chancellorsville, and the Appomattox Campaign. Wounded four times in battle (he was shot in the neck and abdomen at Chancellorsville), on March 2, 1867 he was brevetted a Brigadier General in the regular army in recognition of his actions at Chancellorsville, he was again brevetted to the rank of Major General for Spotsylvania Court House. He received the Medal of Honor (on July 23, 1892) for gallantry at Chancellorsville. He was appointed Brigadier General of volunteers as of May 12, 1864, for the Battles of the Wilderness and Spotsylvania Court House. On October 21, 1865, he was appointed Major General of volunteers at age 26. After the war, he was commandant of Fort Monroe, Virginia, where former Confederate President Jefferson Davis was held prisoner. During his tenure at Fort Monroe, Miles was forced to defend himself against charges that Davis was being mistreated.
General Nelson Miles and other soldiers on horseback in Puerto Rico.
In July 1866, Miles was appointed a colonel in the Regular Army. In March 1869 he became commander of the 5th U.S. Infantry Regiment. On June 30, 1868, he married Mary Hoyt Sherman (daughter of Charles Taylor Sherman, niece of William T. Sherman and John Sherman, and granddaughter of Charles R. Sherman).
Miles played a leading role in nearly all of the Army's campaigns against the American Indian tribes of the Great Plains. In 1874–1875, he was a field commander in the force that defeated the Kiowa, Comanche, and the Southern Cheyenne along the Red River. Between 1876 and 1877, he participated in the campaign that scoured the Northern Plains after Lt. Col. George Armstrong Custer's defeat at the Battle of Little Big Horn and forced the Lakota and their allies onto reservations. In the winter of 1877, he drove his troops on a forced march across Montana and intercepted the Nez Percé band led by Chief Joseph. For the rest of Miles' career, he would quarrel with General Oliver O. Howard over credit for Joseph's capture. While on the Yellowstone, he developed expertise with the heliograph for sending communications signals, establishing a 140-mile-long (230 km) line of heliographs connecting Fort Keogh and Fort Custer, Montana in 1878. The heliographs were supplied by Brig. Gen. Albert J. Myer of the Signal Corps.
In December 1880, he was promoted to brigadier general in the Regular Army. He was then assigned to command the Department of the Columbia (1881–85) and the Department of Missouri (1885–86)
In 1886, Miles replaced General George Crook as commander of forces fighting against Geronimo in the Department of Arizona. Crook had relied heavily on Apache scouts in his efforts to capture the Chiricahua leader. Instead, Miles relied on white troops, who eventually traveled 3,000 miles (4,800 km) without success as they tracked Geronimo through the tortuous Sierra Madre Mountains. Finally, First Lieutenant Charles B. Gatewood, who had studied Apache ways, succeeded in negotiating a surrender, under the terms of which Geronimo and his followers, agreed to spend two years in a Florida reservation. Geronimo agreed on these terms, being unaware of the real plot behind the negotiations (that there was no intent to let them go back in their native lands.) The exile included even the Chiricahuas who had worked for the army, in violation of Miles' agreement with them. Miles denied Gatewood any credit for the negotiations and had him transferred to the Dakota Territory. During this campaign, Miles's special signals unit used the heliograph extensively, proving its worth in the field. The special signals unit was under the command of Captain W. A. Glassford. In 1888, Miles became the commander of the Military Division of the Pacific and the Department of California
In April 1890, Miles was promoted to major general in the Regular Army and became the commander of the Military Division of the Missouri. That same year, the last major resistance of the Sioux on the Lakota reservations, known as the Ghost Dance, brought Miles back into the field. His efforts to subdue the Sioux led to Sitting Bull's death and the massacre of about 300 Sioux. This included women and children at Wounded Knee on December 29, 1890. Miles was not directly involved at Wounded Knee and was critical of the commanding officer. Just two days after the event, Miles wrote to his wife, describing Wounded Knee as "The most abominable criminal military blunder and a horrible massacre of women and children". After his retirement from the Army, he fought for compensation payments to the survivors of the massacre. Overall, he believed that the United States should have authority over the Indians, with the Lakota under military control.