Steele continued his military career during the 1850s and served in Texas, New Mexico, and Nebraska; he rose to the rank of captain. On July 1, 1850, he married Anne Elizabeth Duval. The couple had one child, Laura, who was born in 1856.
At the outbreak of the Civil War, Steele resigned his commission in the United States Army on May 30, 1861, and joined Confederate forces in Texas. On October 4, 1861, he was commissioned as colonel of the Seventh Texas Mounted Rifles. Although assigned to Henry H. Sibley's Army of New Mexico, he did not take a direct role in the campaign up the Rio Grande but remained instead in command of the troops occupying the El Paso/Mesilla area. Upon Sibley’s departure for Richmond at the end of the campaign, Steele remained as civil governor and military commander of Arizona Territory until his promotion to brigadier general in September 1862 and assignment to the command of the Department of Indian Territory. Superseded by Brig. Gen. Samuel Bell Maxey in December 1863, he was assigned to the command of the defenses of Galveston until the spring of 1864 when he took part in the Red River Campaign as a brigade commander in Maj. Gen. Thomas Green’s Cavalry division, which he briefly commanded after Green’s death at the battle of Blair’s Landing.
Following the Civil War, Steele returned to Texas, where, from 1866 to 1873, he engaged in the mercantile business in San Antonio. With the end of Reconstruction in Texas, he was appointed as adjutant general, serving from January 1874 to January 1879, during which time he oversaw the reorganization of the Texas Rangers. Steele died at San Antonio on January 12, 1885, and was buried at Oakwood Cemetery in Austin.
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