The Terrell flag consists of the Scottish "St. Andrew's Cross" with four pyramids, red fringe border, and the words "WE FIGHT FOR OUR COUNTRY" emblazoned. Considering that Terrell was a longtime Mason it is likely that the four pyramids served to notify friend and foe of his affiliation. Often in the War fellow Masons on opposing sides ensured the safety or even the release of brother Masons.

Although there is belief that Terrell's command was the 34th Texas, the 34th is listed in the Confederate Regimental role as "34th Texas Cavalry (Dismounted), Alexander's."

Terrell's Texas Cavalry was organized by Lieutenant Colonel Alexander Watkins Terrell, a native of Virginia and a resident Texan, as a battalion in April, 1863, and was shortly thereafter increased to a regiment.

Existing fragmentary unit rosters of Terrell's commands collected by author John Spencer, including that of the 37th, showed them to be of multiracial makeup including White, Black, Brown and Red Confederates. One Company was commanded by Capt. Jose Rodriguez and the 35th had a Black 3rd Sergeant, James Washington.

On June 20, 1863, the unit was ordered into service. In September the regiment moved to Galveston and was temporarily dismounted. General Edmund Kirby Smith, Commander of the Trans-Mississippi Department, wanted to make Terrell head of the Texas branch of the department's cotton bureau, and Terrell traveled to Houston to speak to the bureau chief. While he was away, several officers led a mutiny and nearly one hundred men left Galveston for their homes.

The officers feared the permanent loss of the regiment's horses. Though he turned down Kirby Smith's offer to head the Texas cotton bureau, Terrell did agree to sit on a committee formed to investigate the "management, purchase and transportation of Government cotton." Terrell submitted the committee's report on March 3, 1864, and ended his association with the cotton bureau.

In November, 1863, Terrell's regiment saw duty at Sabine Pass, LaVaca and Velasco. By the end of the year it was assigned to Colonel Xavier B. DeBray's brigade, a division of Brigadier Hamilton P. Bee's division and was stationed at Camp Wharton on Jones' Creek. Magruder ordered the men back to Galveston in late February, 1864. The Union Red River Campaign, which began in March of that year, caused Kirby Smith to order reinforcements to Major General Richard Taylor's army, and Bee's division was one of the units that was sent to join Taylor near Pleasant Hill. Bee reached Taylor on April 5th with only Terrell's and two other regiments of the division.

On the morning of April 8th, these units skirmished with the advancing Federal army south of Mansfield and held it back while Taylor's infantry units formed a line of battle. The cavalrymen fell back to the army's right flank, but Taylor soon ordered Terrell to reinforce other cavalry units on the army's left. The regiment participated in the battle fought that afternoon, fighting dismounted alongside the infantrymen. Terrell chose to remain mounted as he led his men in the assault. After the Federals were routed, Terrell's men quickly retrieved their horses so that they could conduct a pursuit. They had acquitted themselves well in their first engagement with the enemy.

At the Battle of Pleasant Hill on April 9th, Terrell led his men in an attack on the Union army's left flank, The rough terrain and confused battle lines resulted in Terrell and one of his companies being cut off from the rest of the army. It took them most of the night to make their way back to their own lines. Because of the severe fighting, they had seen on those two days, the men of the regiment were not heavily engaged in the Battle of Blair's Landing on April 12th but acted as flank guards. The remaining regiments of Bee's division had reached the army by this time, and Terrell's regiment formed part of a brigade with the 1st and 35th (Likens') Texas Cavalry regiments, Terrell frequently acted as brigade commander during the succeeding weeks of the campaign. He and his men missed participating in the Battle of Monet's Ferry on April 23rd because Bee sent them to the rear to guard his wagon train.

The regiment fought in several skirmishes as the army pursued the Federals down the Red River, In an engagement at Bayou Lamourie on May 7th, Terrell led an attack that ran into a hidden force of Federals and was thrown back with dozens of casualties. Terrell's men were held in reserve when the Battle of Yellow Bayou (May 18th) began but later reinforced the right flank in time to cover its retreat. Terrell became permanent brigade commander after the conclusion of the campaign.

The 37th performed picket duty along the Atchafalaya River during the Fall and early Winter and fought several skirmishes with soldiers stationed at Morganza. The brigade remained near Alexandria until April, 1865, when it moved to Grand Marshall, Texas. From there the men were dispatched toward Austin. The 37th was disbanded in May at Wildcat Bluff on the Trinity River.

Terrell, appointed a Brigadier General in May, rode from Austin with a group of officers and government officials who had decided to go to Mexico rather than surrender. Terrell was appointed a colonel in the French occupation army and his other officers served under him. He resigned his French commission in November, 1865, and returned to Texas.

Like many other Confederate Army units, Terrell's Texas Cavalry never surrendered.