Following the outbreak of the Civil War, McArthur was appointed colonel of the 12th Illinois Volunteer Infantry.

Following Fort Donelson, McArthur was promoted to brigadier general on March 21, 1862, and led the 2nd Brigade, 2nd Division of the Army of the Tennessee at the Battle of Shiloh.

On the eve of the Battle of Corinth, Brigadier General Thomas J. McKean arrived from St. Louis and due to his rank superseded McArthur in command of the division.

Therefore, McArthur was without a command for a brief period but remained close at hand; even helping Colonel John M. Oliver position the pickets for his neighboring brigade.

He was in command of the 1st Division, XVI Corps and was involved in the pursuit of Sterling Price's Missouri Raid.

His division was transferred with the rest of the corps to Tennessee, where his troops played a significant role in breaking the Confederate lines on the second day of the Battle of Nashville.