Attached thereafter to the steam screw frigate Wabash, he participated in the Battles of Hatteras Inslet, Port Royal and Fort Pulaski before being wounded at Pocotaligo, South Carolina on 22 October 1862. In 1863, after recovering, he was assigned to the monitor Catskill for the siege of Charleston, April 1863–April 1864. Appointed Acting Ensign on 19 August of that year, he commanded the mortar schooner Henry James during operations in the Sounds of North Carolina and the capture of Fort Fisher at Wilmington.
Promoted to ensign and then master in 1868, lieutenant in 1870, lieutenant commander in 1882 and commander in 1892, he assumed command of the gunboat Monocacy, which Admiral Dewey used as a base at Shanghai during the Spanish American War.
After tours at the Boston Navy Yard and at the Naval War College, Farenholt was promoted captain in 1900. He served as Commandant of the Navy Yard at Cavite in the Philippine Islands and commanded the monitor Monadnock, and was promoted rear admiral in 1901. He retired on 1 September of that year and died 30 June 1920 at Mare Island, California. He and his wife Ella are buried at the San Francisco National Cemetery in San Francisco.