His first arrest was for stealing food in late 1875, and five months later he was arrested for stealing clothing and firearms. His escape from jail two days later and flight from New Mexico Territory into Arizona Territory made him both an outlaw and a federal fugitive.
After murdering a blacksmith during an altercation in August 1877, Bonney became a wanted man in Arizona Territory and returned to New Mexico, where he joined a group of cattle rustlers. He took part in the Lincoln County War and joined the Regulators, making him a well-known outlaw in the region.
In April 1878, however, the Regulators killed three men, including Lincoln County Sheriff William J. Brady and one of his deputies. Bonney and two other Regulators were later charged with killing all three men.