During the Spanish-American War he was assistant to the Chief of Engineers, 1st Army Corps, and from 1900 to 1903 was in charge of river and harbor works in New England. He served on the General Staff from 1903 to 1907, when President Theodore Roosevelt appointed him chairman and chief engineer of the Isthmian Canal Commission after two civilian chiefs had resigned in succession. For the next seven years he was engaged in the difficult task of constructing the Panama Canal, which he successfully brought to completion despite the many problems of engineering, climate, disease, and living conditions. He was appointed the first civil governor of the Canal Zone in 1914 and the following year was promoted to major general. Returning to the United States late in 1916, he resigned his post. He became general manager of the United States Shipping Board Emergency Fleet Corp., but left this organization after a few months because of a disagreement regarding policy. Late that same year he was made acting quartermaster general of the Army and in 1918 became chief of purchase, storage, and traffic for the War Department. He was praised by Gen. Peyton C. March as one of the greatest supply men in the history of the United States Army. Following the war he established the firm of George W. Goethals & Co., engineering consultants, in New York. He was also chief consulting engineer for the Port of New York Authority.