While in Surabaya, during the Indonesian National Revolution, Moestopo conducted negotiations with British expeditionary forces led by Brigadier Aubertin Walter Sothern Mallaby.

During the war he held several other positions, including leading a squadron of regular soldiers, pickpockets, and prostitutes to spread confusion in the ranks of the enemy Dutch forces.

During his training he wrote a paper on the military applications of bamboo spears tipped with horse feces, for which he received high marks.

[4] While in Surabaya, he worked at relieving the rising unemployment rate by establishing workshops to produce soap and toothbrushes and reportedly pushed for his men to put horse manure on their bamboo spears to spread tetanus and eat cats for better night vision – the remains of eaten cats are said to have been buried in their own heroes' cemetery.

[3] When the British then went to Governor of East Java, Ario Soerjo, seeking a more friendly reception, Moestopo reportedly wanted the envoys, Macdonald and a naval officer, shot upon arrival.

That afternoon, Moestopo was possible pressured to assist Mallaby in rescuing Dutch captain Huijer,[10] and on 27 October a Douglas C-47 Skytrain from the capital in Batavia (modern day Jakarta) dropped a series of pamphlets signed by General Douglas Hawthorn demanding that the Indonesians surrender their weapons within 48 hours or be treated as hostiles.

Aside from regular military forces, members of the Terate Troops under Moestopo's commanded also included legions of pickpockets and prostitutes who were tasked with spreading confusion in and procuring supplies from behind the Dutch lines.

[11] In May 1947, after serving a period as head of the Struggle Bureau in Jakarta, he was transferred to East Java after being wounded in a skirmish with Dutch forces.

[13] Meanwhile, he came under consideration for position of Minister of Defence for the Wilopo Cabinet, but was ultimately not chosen;[14] instead, he led a series of demonstrations against the parliamentary system.

[1] On 9 November 2007, President Susilo Bambang Yudhoyono gave Moestopo the title National Hero of Indonesia;[16] Moestopo received the title along with Adnan Kapau Gani, Ida Anak Agung Gde Agung, and Ignatius Slamet Riyadi based on Presidential Decree Number 66 / TK of 2007.