As a result of these contacts and skills, Butler was appointed a commissioner to negotiate treaties with Native tribes shortly before the start of the American Revolution. A supporters of the colonial rebels, Butler served as a captain and later a major in the Continental Army. Butler was Danial Morgan's second-in-command where he saw action at the Battle of Saratoga. He later commanded his own detachment of troops. Butler's reputation as a fine soldier was shared by his four other brothers. As a result, the five men were often referred to collectively as the fighting Butlers.
Local mythology suggests that George Washington recognized Butler's contributions during the Revolution by offering him the honor of receiving defeated British General Lord Cornwallis' sword at the surrender ceremony. However, Cornwallis refused to perform this ceremonial surrender and the actual ceremony of surrender was between British General Charles O'Hara and American General Benjamin Lincoln.