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Arthur had shown a strong dislike of slavery and of the way that African-Americans were treated. As a young lawyer, Arthur had defended a number of African-American clients, including Elizabeth Jennings Graham, a sort of Rosa Parks of her day. In 1854 Arthur defended Graham after she was denied a seat on a streetcar because she was African-American. He won the case, and the verdict led to the desegregation of the New York City streetcar lines. In another case, Lemmon v. New York, Arthur argued that, since New York law did not permit slavery, any slave arriving in New York was automatically freed. His argument was successful, and after several appeals was upheld by the New York Court of Appeals in 1860. In 1856 Arthur started a new law partnership with his friend Henry D. Gardiner, and the two of them traveled to Kansas. At that time, the state was the scene of a brutal struggle between pro-slavery and anti-slavery forces, and Arthur sided with the latter. The struggle became quite violent and after four months the two young lawyers returned to New York City.
In 1860, Arthur was appointed to the military staff of Governor Edwin D. Morgan as engineer-in-chief. The office was a patronage appointment, which would have normally been an insignificant one, but the outbreak of the Civil War in 1861 changed things. New York and the other northern states were faced with raising and equipping armies of a size never before seen in American history. Arthur was given the rank of brigadier general and assigned to the quartermaster department. He was reported to be so efficient at housing and outfitting the troops that poured into New York City that he was promoted within the state militia to inspector general in February 1862, and then to quartermaster general that July.
Arthur was given the opportunity to serve at the front when the 9th New York Volunteer Infantry Regiment elected him colonel early in the war, but he turned it down to remain at his post in New York. This was partly because of his wife's family ties to the Confederacy, and partly because Governor Morgan wanted him to remain as part of his staff. The closest Arthur came to the front was when he traveled south to inspect New York troops near Fredericksburg, Virginia, in May 1862, shortly after forces under Major General Irwin McDowell seized the town during the Peninsula Campaign. That summer, he and other representatives of northern governors met with Secretary of State William H. Seward in New York to coordinate the raising of additional troops, and spent the next few months enlisting New York's quota of 120,000 men.
Although Arthur performed well in his various wartime positions, his appointment was a political one. In January 1863 when Governor Horatio Seymour, a Democrat, defeated Morgan and took office, Arthur was relieved of his position.
Arthur returned to his law practice in 1863 and, with the help of additional contacts made in the military, his practice flourished. However, Arthur and his wife experienced a personal tragedy as their only child, William, died suddenly that year at the age of three. The couple took their son's death hard, and when they had another son, Chester Alan Jr., in 1864, they were said to be very protective of him. (They would also have a daughter, Ellen, in 1871. Both children survived to adulthood.)
Arthur's political prospects improved along with his law practice when his patron, ex-Governor Morgan, was elected to the United States Senate. He was hired by Thomas Murphy, a hatter who sold goods to the Union Army, to represent him in Washington. The two became associates within New York Republican party circles, and both men rose in the ranks of the party. In the presidential election of 1864, Arthur and Murphy raised funds from Republicans in New York and attended Abraham Lincoln's inauguration in 1865.