There was considerable apprehension in North Carolina over the successful coastal invasion of Federal General Ambrose Burnside's troops, and the state government competed successfully with the Confederacy for the use of its own troops in defending its own soil. The Federal troops were able to retain their control over most of the Albemarle Sound region for the duration of the war, but they were never able to muster sufficient strength to capitalize on their hold. The North Carolinians were able to turn this potentially disastrous situation into a successful holding and containment action, and Ransom considered his efforts in this affair as some of his best in "bringing order out of chaos."

By June 1862 there were more pressing needs for his services in resisting General George B. McClellan's march towards Richmond. Ransom's brigade joined Robert E. Lee's forces in the Seven Days' Battle. They fought well despite their futile piecemeal attacks against the strongly held Federal position on Malvern Hill. In September, as Lee initiated his first invasion of the North, the brigade helped General Stonewall Jackson capture Harper's Ferry and then, as part of J. G. Walker's division, stopped three Federal assaults on the bloody Sharpsburg battlefield. By December 1862 Union forces were again moving against Richmond, but this time under their new commander, Ambrose Burnside, by way of Fredericksburg, Va. The battle that took place there was a crushing defeat for the Federals, and Ransom played a major part in the Confederate success. He commanded a division that held Marye's Heights overlooking the town. Repeated Federal frontal attacks across exposed fields against the position resulted in some 9,000 Union casualties versus only about 1,500 on the Confederate side in one day's fighting. With the withdrawal of the Union Army of the Potomac, Ransom's division was once more returned to contain the Federals in North Carolina, this time in response to an enemy attack on the strategically vital Wilmington and Weldon Railroad. The Northerners pushed as far as Goldsboro but failed to capture the town, being successfully contained by the Confederates.

Ransom's success in these campaigns gained him promotion to major general in May 1863, and he was ordered to take over command of Richmond from General D. H. Hill. For two months he organized the defenses of this key city but was forced to give up his post when he had a recurrence of the ill health that had plagued him before the war. By October he had recovered sufficiently to head the Military District of Southwestern Virginia and East Tennessee, where he participated in the fighting around Knoxville and warded off Federal raids and diversionary maneuvers.

In April 1864 he was again ordered to command the defense of Richmond and was instrumental in "bottling up" Union General Benjamin F. Butler's advance up the James River at Bermuda Hundred. In June 1864, as the siege of Petersburg settled down, Ransom was assigned command of General Jubal Early's cavalry and rode out of the Shenandoah Valley to test the defenses of Washington, D.C. The U.S. capital was strong enough, but the Confederates succeeded in instilling a sense of panic among the inhabitants and the Federal government before they returned southwards. Ransom reported that he "came within 100 yards of the defense works" on the northern side of the city, closer than any other Confederate general. This action was to be Ransom's last participation in the fighting. In July 1864 he again took sick but was in charge of an investigation regarding outrages allegedly perpetrated by Confederate General John Morgan's raids in Kentucky. In November he was sent to command the forces at Charleston, S.C., but again became ill and remained on sick leave for the duration of the war.

The depressed and defeated South was not the sort of environment in which Ransom could easily adjust after some twenty years of military life under two dissimilar and competing American governments. From 1865 to 1867 he resided in Wilmingtonand worked as a freight company's agent and as marshal of the city. Discouraged, he turned to selling railroad supplies to rebuild the devastated southern rail system until 1875. This task completed, he settled down to a life of farming near Richmond, Va., but this interest lasted only four years. Periodically Ransom fell ill, and he frequently visited the mineral springs of western Virginia for the relief of growing rheumatism. In 1878 he became assistant to the U.S. civil engineer in New Bern and worked to improve various rivers and harbors in both Carolinas. He continued this work until his death in New Bern, where he was buried in Cedar Grove Cemetery beside his first wife, who had died in 1881.

In 1884 Ransom married his second wife, Katherine DeWitt Willcox Lumpkin, of Athens, Ga., widow of Francis G. Lumpkin. Ransom's first wife bore him nine children: Fannie Priscilla, Mary Elizabeth Huntt, Robert, Gibson Huntt, James Boisseau Jones, Matt Whitaker (daughter), Henry Huntt, George Gibson, and Seymour Herbert. His second wife gave him three more: Katherine DeWitt, Eugene Mayson, and Emily Carnes.