Buell graduated from West Point in 1841 and was a company officer of infantry in the Seminole War of 1841–42 and the Mexican War. From 1848 to 1861 he acted chiefly as assistant adjutant general. On the outbreak of the Civil War he was appointed lieutenant colonel, then brigadier general of volunteers and major general of volunteers in March 1862. He aided in organizing the Army of the Potomac and was sent, in November 1861, to Kentucky to succeed General William T. Sherman in command. There he organized and trained the Army of the Ohio, which to the end of its career retained a standard surpassed only by that of the Army of the Potomac. In the spring of 1862 Buell pursued the retiring Confederates under General Sidney Johnston, served under General Henry W. Halleck in the Union advance on Corinth, and in the autumn commanded in the campaign in Kentucky against the Confederate general Braxton Bragg. A period of maneuvering ended in the indecisive Battle of Perryville. The alleged tardiness of his pursuit and his objection to a plan of campaign ordered by the Washington authorities brought about his removal from command. The complaints made against him were investigated in 1862–63, but the result was not published.

Subsequently, he was offered military employment, which he declined. He resigned his volunteer commission in May and his regular commission in June 1864. After the war he settled in Kentucky, where he engaged in mining.