When the Civil War began Forrest enlisted as a private but Tennessee's governor soon appointed him to raise (and pay for) his own cavalry battalion. He was commissioned a lieutenant colonel to lead the 650 recruits. He proved to be one of the Civil War's most outstanding cavalry officers, although critics assailed him for ruthlessness in general and instigating the Fort Pillow Massacre in particular. He steadily climbed the ladder of promotions to colonel (March 1862) to brigadier general (July 1862) to major general (December 1863) to lieutenant general (February 1865). He fought at Fort Donelson, Shiloh, and Murfreesboro (Stones River). He organized a new brigade in the fall of 1862, winning victories in Tennessee, Georgia (Chickamauga), and Mississippi (Okolona).

Already well known and feared, Forrest earned infamy in the North as a result of the Fort Pillow Massacre of April 12, 1864. The fort was defended by Union troops, including the 11th U.S. Colored Troops, and was refuge for some civilians. Federal officials and the Northern press maintained that Forrest's troops killed many of the Union soldiers, singling out blacks, after they had surrendered. In all, 221 were killed on the Union side, 120 wounded, and the rest were captured; only 14 Confederates were killed and 86 wounded. The Congressional Committee on the Conduct of the War concluded that the Confederate troops were guilty of war atrocities: murdering men who had surrendered, burning tents containing the wounded, and burying men, particularly black men, alive; and that Forrest bore ultimate responsibility. His defenders claimed that he attempted to restrain his men and dealt fairly with the prisoners. Whatever the truth was, Forrest and Fort Pillow became symbols of Confederate violence and racism, and Thomas Nast would forever after associate Forrest with the Fort Pillow atrocities.

Forrest continued to rack up victories for the Confederacy and elude capture by the Union. At Memphis his 1500 raiders forced 17,000 Union men to flee; he disrupted the flow of supplies to General William Tecumseh Sherman; and administered the entire Confederate cavalry of the Alabama, Mississippi, and eastern Louisiana region. He was urged to continue fighting after Lee's surrender, but he ordered his men to lay down their arms. Although untrained in military tactics or strategy, and in fact barely literate, Forrest is considered to have been a natural military genius. The motto attributed to him is: "get there first with the most men."