Transferred to Texas, Stevenson served on frontier duty until the Mexican-American War. He fought with distinction in the battles of Palo Alto and Resaca de la Palma, and participated in several other fights before returning to the United States at posts in Mississippi, Indian Territory, and Texas. He helped explore parts of the proposed Southern route for the Pacific railroad, often skirmishing with Apache Indians.
In 1856–57, Stevenson again was in combat in Florida, this time in the Third Seminole War, fighting in the battles of Big Cypress Swamp and Bowleytown. By now a veteran warrior, Stevenson returned to the West and fought in the Utah conflict with the Mormons. During his stay in the Utah Territory, Stevenson joined Rocky Mountain Lodge #205 of the Freemasons. He later returned to routine garrison duty on the frontier until 1861.
When Federals seized the Cumberland Gap, Stevenson, exercising independent command, led a Confederate force that captured the Union garrison at Munfordsville and compelled Gen. George W. Morgan's withdrawal. In July, Stevenson's division helped pursue the Union forces into Kentucky, where he combined his forces in the Department of East Tennessee with Edmund Kirby Smith, serving under Smith during the return trip to the Confederate base at Murfreesboro, Tennessee. Recognized again for his leadership ability, he was promoted to major general in October 1862 and led his division at the Battle of Perryville.
In December, Braxton Bragg sent Stevenson with 10,000 men to reinforce John C. Pemberton's force at Vicksburg, Mississippi, which was threatened by a Union army under Ulysses S. Grant. His division bore the brunt of fighting at the Battle of Champion's Hill. The main Federal assault (nearly 25,000 troops) was against Stevenson's line, held by barely 6,500 men. After stubborn resistance, Stevenson finally withdrew when his lines began breaking. When Pemberton's force was defeated at Big Black Bridge, Stevenson (whose men had seen no significant action in the battle) commanded the retreating columns while General Pemberton hastened to Vicksburg to prepare the defenses of the city. During the Siege of Vicksburg, Stevenson commanded the right of the entire Confederate defensive line. When Pemberton surrendered the army on July 4, 1863, Stevenson briefly became a prisoner of war before receiving a parole.
General Stevenson reported to the Army of Tennessee at Chattanooga, Tennessee, and was given command of a division in William J. Hardee's corps, stationed on the right flank guarding Lookout Mountain. He withdrew his troops after the Battle of Lookout Mountain and destroyed the bridges over Chickamauga Creek and other waterways to delay the advance of Joseph Hooker's Union corps. He reinforced the main Confederate battle line on Missionary Ridge just before the Battle of Chattanooga. During the 1864 Atlanta Campaign, Stevenson's division was in John Bell Hood's corps and fought in the battles around Atlanta, including Resaca, Kennesaw Mountain and Peachtree Creek. When General Hood was elevated to command of the army, Stevenson temporarily assumed command of Hood's Corps.
During the Tennessee Campaign, Stevenson commanded a division in Stephen D. Lee's corps in the center of the line at the Battle of Nashville. When Lee was wounded, he took charge of organizing and leading the retreat. His division had suffered enormous casualties and had been unable to recruit significant numbers of replacements. Down to approximately 2,600 men, the depleted division participated in the Carolinas Campaign against William T. Sherman, including the Battle of Bentonville. For the second time in the war, Stevenson surrendered to the Federals when Joseph E. Johnston surrendered his army in April 1865 to Sherman. Stevenson again was paroled and sent home.
In 1914, Maj. Gen. Carter L. Stevenson was commemorated with a marble bust at the Vicksburg National Military Park.