He was promoted to the full rank of captain in October 1860 and served as the Chief of Commissary for the army's Department of New Mexico.

In December, he was assigned command of a brigade of cavalry stationed at Annapolis, Maryland, serving under General Rufus King.

In August of that year, after incurring the wrath of army commander John Pope for two failed cavalry raids, he was reassigned to the infantry.

He was brevetted as a major general of volunteers and subsequently received the Medal of Honor for his gallantry under severe enemy fire.

Hatch was disabled until February 1863, when he returned to light administrative duties, serving as a judge on courts-martial and commanding the draft rendezvous at Philadelphia in July.

He was in charge of operations on John's Island, South Carolina, in July and led the Federal forces at the Battle of Honey Hill in November.

He subsequently operated in cooperation with Major General William T. Sherman in the Georgia-Carolinas Campaign and took part in the attack on Charleston.

In the omnibus promotions following the war, he was brevetted from March 1865 both as a major general of volunteers dating and as a colonel in the Regular Army.