The Luna Sharpshooters was a short-lived unit formed by Luna to serve under the Philippine Revolutionary Army. On 11 February, eight infantrymen, formerly under Captains Márquez and Jaro, were sent by then-Secretary of War Baldomero Aguinaldo to Luna, then-Assistant Secretary of War. The infantrymen were disarmed by the Americans. So, they journeyed to be commissioned in the regular Filipino army. Seeing their desire to serve in the army, Luna took them in and from their group grew and emerged as the Luna Sharpshooters. The sharpshooters became famous for their fierce fighting and proved their worth by being the usual spearheading unit in every major battle in the Philippine–American War. After the Battle of Calumpit on 25–27 April 1899, only seven or eight of them remained in the regular Filipino army. In the Battle of Paye on 18 December 1899, a Filipino sharpshooter, Private Bonifacio Mariano, under the command of General Licerio Gerónimo killed General Henry Ware Lawton, making the latter the highest ranking casualty during the course of the war.
Earlier in May 1899, Luna almost fell in the field at the Battle of Santo Tomas. Mounted on his horse, Luna then charged into the battlefield leading his main force in a counterattack. As they advanced, the American forces began firing upon them. Luna's horse was hit and he fell to the ground. As he recovered, Luna realized that he had been shot in the stomach, and he attempted to kill himself with his revolver to avoid capture. He was saved, though, by the actions of a Filipino colonel named Alejandro Avecilla who, having seen Luna fall, rode towards the general to save him. Despite being heavily wounded in one of his legs and an arm, with his remaining strength Avecilla carried Luna away from the battle to the Filipino rear. Upon reaching safety, Luna realized that his wound was not very deep as most of the impact of the bullet had been taken by a silk belt full of gold coins that his parents had given him, which he had been wearing. As he left the field to have his wounds tended, Luna turned over the command to General Venacio Concepción, the Filipino commander of the nearby town of Angeles. Meanwhile, in recognition of his work, Luna was awarded the Philippine Republic Medal. By the end of May 1899, Colonel Joaquín Luna, one of Antonio's brothers, warned him that a plot had been concocted by "old elements" or the autonomists of the Republic (who were bent on accepting American sovereignty over the country) and a clique of army officers whom Luna had disarmed, arrested, and/or insulted. Luna shrugged off all these threats, reiterating his trust for Aguinaldo, and continued building defenses at Pangasinan where the Americans were planning a landing.
On 2 June 1899, Luna received two telegrams (initially four, but he never received the last two) – one asked for help in launching a counterattack in San Fernando, Pampanga; and the other, sent by Aguinaldo himself, ordered him to go to the new capital at Cabanatuan, Nueva Ecija to form a new cabinet. In his jubilation, Luna wrote Arcadio Maxilom, military commander of Cebu, to stand firm in the war. Luna set off from Bayambang, first by train, then on horseback, and eventually in three carriages to Nueva Ecija with 25 of his men. During the journey, two of the carriages broke down, so he proceeded with just one carriage with Colonel Francisco Román and Captain Eduardo Rusca, having earlier shed his cavalry escort. On 4 June, Luna sent a telegram to Aguinaldo confirming his arrival. Upon arriving at Cabanatuan on 5 June, Luna alone, proceeded to the headquarters to communicate with the President. As he went up the stairs, he ran into an officer whom he had previously disarmed for insubordination, Captain Pedro Janolino, commander of the Kawit Battalion; and an old enemy whom he had once threatened with arrest for favoring American autonomy, Felipe Buencamino, Minister of Foreign Affairs and a member of the Cabinet. He was told that Aguinaldo had left for San Isidro in Nueva Ecija (He actually went to Bamban, Tarlac). Enraged, Luna asked why he had not been told that the meeting was cancelled.
Subsequently, Aguinaldo suffered successive, disastrous losses in the field, as he retreated northwards. On 13 November 1899, Aguinaldo decided to disperse his army and begin conducting a guerrilla war. General José Alejandrino, one of Luna's remaining aides, stated in his memoirs that if Luna had been able to finish the planned military camp in the Mountain Province and had shifted to guerrilla warfare earlier as Luna had suggested, Aguinaldo might have avoided having to run for his life in the Cordillera Mountains. For historian Teodoro Agoncillo, however, Luna's death did not directly contribute to the resulting fall of the Republic. In his book, Malolos: The Crisis of the Republic, Agoncillo stated that the loss of Luna showed the existence of a lack of discipline among the regular Filipino soldiers and it was a major weakness that was never remedied during the course of the war. Also, soldiers connected with Luna were demoralized and as a result eventually surrendered to the Americans. Despite Aguinaldo denying the allegation of his being involved in Luna's death multiple times, an original copy of the telegram he sent to Luna was discovered in 2019 showing his order for Luna to visit Cabanatuan.