Between August 1919 and February 9, 1920, Bandholtz was the US representative to the Inter-Allied Supreme Command's Military Mission in Hungary. The Military Mission was charged with disarming the Hungarian military and supervising the withdrawal of the Serbian and Romanian armies, which were occupying the territory of Hungary. The Allies had promised that people would be able to make self-determination of their futures as Austria-Hungary and other empires were broken up. According to his own accounts, he is said to have prevented the arrest of Hungarian Prime Minister István Friedrich by the Romanians. On 25 August, in the MÁVAG factory he intercepted 135 Romanian trucks packed with material despite the prohibition of requisition and prevented the factory from sacking. He is also remembered for preventing the Romanian military authorities from removing artefacts from the Hungarian National Museum on October 5, 1919; he was "armed" only with a riding crop. Bandholtz locked the doors and placed signs that read, "This door sealed by Order the Inter-Allied Military Commission. H.H. Bandholtz, President of the Day, October 5th, 1919." The Romanian aim was to recover artefacts taken from the Library of the Romanian Academy during the Central Powers' occupation of Bucharest and from the Transylvanian museums (from a territory which was claimed by the Kingdom of Romania) by the retreating Austro-Hungarian troops.