Upon the outbreak of the First Anglo-Sikh War in December 1845, Nicholson was serving as a staff officer in the commissariat department of Sir Hugh Gough's field force which marched into the Punjab. In this role, Nicholson's main responsibility throughout the war was keeping Gough's force well supplied with provisions and ammunition. Following the decisive British victory at the Battle of Sobraon, Nicholson was taken under the wing of Henry Montgomery Lawrence along with several other similarly aged officers such as Herbert Edwardes, James Abbott, Neville Chamberlain, Frederick Mackeson, Patrick Alexander Vans Agnew, William Hodson, Reynell Taylor, Harry Burnett Lumsden, Henry Daly, John Coke, this group was known as Henry Lawrence's "Young Men". As part of this small band of young and driven men, Nicholson was given much power as a political officer on the North-West Frontier. His first posting in this new role was in July 1846 to the princely state of Jammu and Kashmir where he was to help solidify the rule of the British-installed Maharaja, Gulab Singh. Singh, however, was not a popular ruler in Kashmir and Nicholson took part in the suppression of a revolt against his rule. He spent the remainder of 1846 isolated in the Kashmir Valley serving as the sole British advisor to Singh at his court in Srinagar. To his relief, Nicholson was recalled to Lahore by Lawrence in February 1847. Nicholson's next significant assignment was helping James Abbot win over the various tribes of the Hazara region which he did by partaking in a daring nighttime raid against the Tahirkheli tribe's mountain stronghold, after which Nicholson and Abbott would form a strong friendship.