On the outbreak of the American Civil War Holt became a strong supporter of the Union cause. He told fellow members of the Democratic Party in Kentucky that disunion would mean "national weakness, standing armies and incessant wars and expensive frontier fortifications."
Lincoln was grateful fort Holt's support and in September, 1862, he appointed him as the country's first Judge Advocate General of the Army.
Holt was a strong opponent of the emancipation of the slaves. He was highly critical of Major General John C. Fremont, the commander of the Union Army in St. Louis, proclaimed that all slaves owned by Confederates in Missouri were free. He supported Lincoln's decision to sack Fremont when he refused to back down on this issue. Holt commented that African Americans were "unprepared for freedom and whose presence could not fail to prove a source of painful apprehension if not of terror to the homes and families of all."
In 1863 Holt led the prosecution of Clement Vallandigham, the leader of the Peace Democrats (Copperheads). He was arrested in May, 1863 and accused of treason. Found guilty by a military commission, he was sentenced to imprisonment. Soon afterwards Lincoln intervened and commuted his sentence to banishment behind the Confederate Army front lines.
In 1864 Holt was asked by Edwin M. Stanton to investigate disloyalty in the North. In his report Holt suggested that secret organizations such as the Order of American Knights and the Sons of Liberty were aiding Confederate forces. He claimed that Clement Vallandigham was the leader of this movement.
When Abraham Lincoln was assassinated in April, 1865, Holt joined Edwin M. Stanton, Secretary of War and James Speed, the Attorney General, in calling for the conspirators to be tried by the military commission. The new president, Andrew Johnson, agreed and ordered the formation of a nine-man military commission.
The trial, with Holt, the government's chief prosecutor, began on 10th May, 1865. The military commission included leading generals such as David Hunter, Robert Foster, August Kautz,, Lewis Wallace, Thomas Harris and Albion Howe.
Mary Surratt, Lewis Paine, George Atzerodt, David Herold, Samuel Mudd, Michael O'Laughlin, Edman Spangler and Samuel Arnold were all charged with conspiring to murder Lincoln. During the trial Holt attempted to persuade the military commission that Jefferson Davis and the Confederate government had been involved in conspiracy.
Holt attempted to obscure the fact that there were two plots: the first to kidnap and the second to assassinate. It was important for the prosecution not to reveal the existence of a diary taken from the body of John Wilkes Booth. The diary made it clear that the assassination plan dated from 14th April. The defence surprisingly did not call for Booth's diary to be produced in court.
On 29th June, 1865 Mary Surratt, Lewis Paine, George Atzerodt, David Herold, Samuel Mudd, Michael O'Laughlin, Edman Spangler and Samuel Arnold were found guilty of being involved in the conspiracy to murder Abraham Lincoln. Surratt, Paine, Atzerodt and Herold were hanged at Washington Penitentiary on 7th July, 1865. Surratt, who was expected to be reprieved, was the first woman in American history to be executed.
The Military Commission had recommended that Mrs. Surratt be shown mercy "due to her sex and age". President Andrew Johnson was later to say he was never told this and he gave the order to hang the woman who he pointed out "kept the nest that hatched the egg". Holt later testified that he had drawn Johnson's attention to the feelings of the commission and in his retirement argued that he suspected that Mrs. Surratt had not been involved in the plot to kill Abraham Lincoln. Joseph Holt died in 1894.