For what Theophilous Noel characterized as "his daring gallantry," Green promoted McNelly to captain of scouts and on November 25, 1863, recommended him for a captain's commission. In Green's southern Louisiana campaign of 1864 McNelly played major roles in the battles of Brashear City and Lafourche Crossing. He was seriously wounded at the battle of Mansfield in April 1864, and command of his company devolved upon his lieutenants, William D. Stone and Thomas T. Pitts, who led the unit with distinction at Pleasant Hill, Blair's Landing, and Grande Écore. After recovering from his wound, McNelly returned to his command in May in time to participate in the battle of Yellow Bayou. He was then ordered into the Bayou Lafourche country of southern Louisiana to scout and harass the enemy.
On July 1, 1864, after Green's death at the battle of Blair's Landing, Louisiana, McNelly was transferred to Gen. John A. Wharton's cavalry corps and on July 6 was ordered with his company east of the Atchafalaya River "to procure and transmit to these Headquarters the latest and definite information of the enemy's movements in that section." In 1864 McNelly commanded a scout company on Bayou Grosse Tete west of Baton Rouge, Louisiana. In Noel's words, his company "betook themselves to the swamps and canebrakes where they confined their operations until the enemy commenced their retreat." Typical of McNelly's exploits was the capture of 380 men in the Union garrison at Brashear City, Louisiana, by his party of fifteen or twenty scouts. After a period of "hunting up Jayhawkers on the Calcasieu," McNelly was transferred to Gen. George G. Walker's cavalry corps and ordered to Washington County, Texas, to arrest deserters.
After the war he turned to farming near Brenham and there married Carey Cheek. They had two children. He later worked for a time in the General Land Office. During the Edmund J. Davis administration, McNelly served as one of the four captains of the State Police from July 1, 1870, until the force was disbanded on April 22, 1873. In February 1871, after arresting four white men for the murder of a freedman in Walker County, McNelly was wounded by friends of the accused. In July 1874 a thirty-man company of volunteer militia from Washington County was mustered into the Texas Rangers as the seventh company of the Frontier Battalion. McNelly was appointed its captain and assigned to duty in DeWitt County, where the Sutton-Taylor feud was then raging. After four months of attempting to suppress civil violence there, McNelly reported that the presence of his men had been beneficial but that he was sure fighting would flare again as soon as the troops were withdrawn.
In the spring of 1875 he was commissioned to raise a new company for service in the area between the Nueces River and the Rio Grande known as the Nueces Strip. This area, wrote historian Walter Prescott Webb, "stood out as something special in the way of brigandage, murder, and theft. It had more than its share" of such outlaws as John King Fisher and Juan N. Cortina. Thomas C. Robinson served as McNelly's first lieutenant, J. W. Guyon as his second lieutenant, and John B. Armstrong as his sergeant. The forty-man company saw two years of active duty, 1875–76. Nineteenth-century ranger historian Wilburn Hill King wrote that the company was "active, vigilant, daring, and successful in dealing with lawless characters" in the border region. But McNelly's methods were questionable. His men were known to have made a number of extralegal border crossings in violation of Mexican territorial sovereignty, for which he was removed from command of the company and replaced by Jesse Lee Hall.
After his removal, at the request of DeWitt county judge H. Clay Pleasants, McNelly served as an unofficial ranger during the trials of several leading defendants of the Sutton-Taylor feud in October 1876. Thereafter he retired to his farm at Burton, where he died of tuberculosis on September 4, 1877. He was buried at Burton. Remembered as "a tallish thin man of quiet manner, and with the soft voice of a timid Methodist minister," McNelly nevertheless was party to many illegal executions and to confessions forced from prisoners by extreme means. To the present day his tactics remain a subject of controversy on the border, where many remember him best for his torture and hanging of prisoners. Nevertheless, citizens of South Texas erected a monument, paid for by public subscription, to his memory.
30° 12.843, -096° 34.585
Mount Zion Cemetery