On 23 Dec. 1842 Lawrence was promoted brevet-major for his services. On the 31st of the same month he was presented with a sword by the maharajah of Lahore, and on the same day received the appointment of superintendent of the Dehra Doon and Mussooree from the governor-general. He went to Mussooree in January 1843, but had hardly traversed the district when it was found that the regulations only permitted such an appointment to be held by a covenanted civil servant, and on 17 Feb. he was transferred to Umballa as assistant to the envoy at Lahore. After two months, the death of the rajah of Kythul without issue caused the lapse of his territory to the British government, and Lord Ellenborough himself intimated to the envoy of Lahore that of all his assistants Lawrence was best qualified for the charge. He was accordingly appointed, and lost no time in completing the settlement of the Kythul territory.
Lawrence was disappointed at not receiving a C.B. for his services in the Cabul campaign, but the governor-general showed his appreciation of his services by promoting him on 1 Dec. 1843 to the residency of Nepaul. At Kurnaul, on his way to Nepaul, he met his brother John, who had married in 1841, and had just returned from England; and during the few quiet days the brothers and their wives passed together at this station Henry Lawrence wrote a defence of Sir William Hay Macnaghten [q. v.] It does not appear to have been published, but its purport was to show that the Cabul disaster was a military one, and that Macnaghten was not responsible for it.
Although no white-faced woman had hitherto been seen in Nepaul, Lawrence's wife soon joined him there, and they settled down at Katmandoo for two years of a quiet, busy, and happy life. Lawrence's duties as resident were to interfere as little as possible with the native government, but to watch any movement injurious to British interests, and to offer counsel in all state matters affecting the British government whenever it was sought or likely to be acceptable. He had therefore more leisure than he had previously enjoyed, and occupied himself in literary pursuits. He became a constant contributor to the ‘Calcutta Review’ from its commencement, and to other periodicals. His pen was fertile, and his contributions both weighty and sagacious, but they mainly owed their literary style to his wife. At the same time he projected the formation of an establishment in the north-west hills for the children of European soldiers. The result was the foundation of the Lawrence Asylum, which was endowed and largely supported through life by Lawrence at considerable self-sacrifice, and was commended in his will to the care of government. The government of India accepted the charge, and has largely developed Lawrence's scheme in other parts of India.
At the end of 1845 Mrs. Lawrence was compelled, for the sake of her children and for her own health, to return to England, and her husband accompanied her on the way to Calcutta. On 6 Jan. 1846, while on the journey, at Gorruckpore he was unexpectedly summoned to join the army of the Sutlej. The first Sikh war had broken out, the battles of Moodkee and Ferozeshah had been fought, Major Broadfoot, the political officer, had been killed, and Lawrence was required to replace him. He received his orders at 7 p.m., and left to execute them on the next afternoon. He found that Sir Henry Hardinge had appointed him on 3 Jan. governor-general's agent for foreign relations and for the affairs of the Punjaub. On 1 April was added the appointment of governor-general's agent for the affairs of the north-west frontier. Lawrence was present at Sobraon and the occupation of Lahore. He was in complete accord with the governor-general in his objection to annexation. Lawrence's general views, indeed, were that we should abstain from any enlargement of our territory that was not provoked by the absolute need of security; that we should enforce, by example, on the natives of India the duties of justice and forbearance, and apply ourselves to the task of raising the moral character of the governing and aristocratic classes, or such relics of them as were left, and so enable new Indian sovereignties to grow up under British protection. It was, however, necessary to punish the Sikhs, and immediately after they invaded British territory, a proclamation had been issued confiscating the Cis-Sutlej possessions of the Lahore crown. The Jullunder Doab was now annexed in addition, in order to obtain security for our hill stations and a position which would give us control of the Sikh capital. The existing Sikh authority at Lahore was to be maintained for a limited period by means of a subsidiary British force, and Cashmere was to be handed over to Goolab Sing. In June 1846 Lawrence was promoted brevet-lieutenant-colonel for his services at Sobraon.
Intrigues against the British were rife in the Khâlsa at Lahore, and the governor of Cashmere, Sheik Imammoodeen, supported by Lal Sing and the Sikh durbar, first delayed and then refused to hand over Cashmere to Goolab. Lawrence's firmness and energy were