He was a Sergeant in Company C, 5th US Infantry Regiment, during the Indian Wars in which he earned the Medal of Honor. During the Indian Campaigns from October 21, 1867 to January 8, 1877, Wallace and his unit were major factors in providing protection to settlers in the Montana region, especially around Cedar Creek, Montana. During the winter campaign of 1876, General Nelson Miles led American soldiers against the Sioux Indians, and in one encounter, Sergeant Wallace saved a group of settlers from the Indians. Facing not only hostile Indians, Wallace also endured the harsh winter weather and meager living conditions to bring security to settlers throughout the region in and around the Montana Territory. He and 31 other soldiers were singled out for "gallantry in actions" during this ten-year period.