During World War II, Rhoads was commissioned as a colonel and assigned as chief of medicine in the Chemical Weapons Division of the U.S. Army. He established the U.S. Army chemical weapons laboratories in Utah, Maryland, and Panama. With his enthusiastic participation, secret experiments including race-based tests involving African Americans, Japanese Americans, and Puerto Ricans were performed on more than 60,000 U.S. soldiers. Many were left suffering from debilitating, lifelong aftereffects. For this work, he won the Legion of Merit for "combating poison gas and other advances in chemical warfare" in 1945.