Upon the outbreak of the Black Hawk War in 1832, Stephenson raised a company and saw combat, suffering severe wounds at the Battle of Waddams Grove.

[4] In 1828 Stephenson left Edwardsville, and moved to Galena in Jo Daviess County where he made his home for much of the rest of his life.

However, Sauk leader Black Hawk and others disputed the treaty, claiming that the full tribal councils had not been consulted, nor did those representing the tribes have authorization to cede lands.

[5] Angered by the loss of his birthplace, between 1830–31 Black Hawk led a number of incursions across the Mississippi River into Illinois, but was persuaded to return west each time without bloodshed.

[5] Finding no allies, he attempted to return to Iowa, but the undisciplined Illinois militia's actions led to the Battle of Stillman's Run.

[8][9] Though Waddams Grove did little to put an end to Sauk raids in the region, it did help bolster public confidence in the militia.

When news of the attack at Sinsinawa Mound reached Galena, Captain Stephenson set out with 30 soldiers to pursue the raiders.

[13] In the week preceding another of the war's major turning points, the June 16 Battle of Horseshoe Bend, Stephenson helped Colonel Henry Dodge and his men bury the victims of the St. Vrain massacre.

He spent time in St. Louis, where he married Ellen Kyle in December, then traveled on to Edwardsville and Vandalia, Illinois; the couple eventually had two children.

[2][15][16] Within six months of his nomination, Stephenson was caught in a funds embezzling scandal, surrounding his time as Register of Lands, and forced to withdraw from the election.

"[18] James Washington Sheahan wrote in his 1860 biography of Stephen A. Douglas that Stephenson's early exit from the election was due to being "charged with being a defaulter.