Morgan went into business, and made a small fortune in railroads and mines. He was elected to the New York State Assembly and Senate. His passion remained ethnographic scholarship.
When he traveled to the frontier of Michigan on railroad business, Morgan became interested in the beaver, and did research to publish a work on the animal that shaped the environment through its construction of dams.
In the late 1850s, Morgan took up the comparative study of kinship terms in time he spared from business and law pursuits. Originally this was an attempt to prove that the natives of the New World originally came from Asia; Morgan's intention was to provide evidence for monogenesis, the theory that all human beings descend from a common source (as opposed to polygenism). This original inspiration became less relevant because of the Darwinian revolution. In addition, Morgan became increasingly interested in the comparative study of kinship (family) relations as a window into understanding larger social dynamics; he saw kinship relations as a basic part of society.
In the late 1850s and 1860s, Morgan collected kinship data from a variety of Native American tribes. In his quest to do comparative kinship studies, Morgan corresponded with scholars, missionaries, US Indian agents, colonial agents, and military officers around the world. He created a questionnaire which others could fill out so he could collect data in a standardized way. Over several years, he made months-long trips to what was then the Wild West to further his research. In 1862 in Sioux City, South Dakota on what would be the last of such trips, Morgan found out that his two young daughters, Mary and Helen, had died.
"Two of three of my children are taken," he wrote in his journal. "Our family is destroyed. The intelligence has absolutely petrified me. I have not shed a tear. It is too profound for tears. Thus ends my last expedition. I go home to my stricken and mourning wife, a miserable and destroyed man."
Morgan continued to live a full life with his wife and son. He had an expansive business and political career. He engaged actively with American policy toward Native Americans and tried unsuccessfully to become Commissioner of Indian Affair and an ambassador. During his European travels, he met with Charles Darwin and the great British anthropologists of the age. He continued with his independent scholarship and was not affiliated with any university.
In addition to his important books, Morgan was an intellectual mentor to those who followed, including John Wesley Powell, who became head of the Smithsonian Institution. He commented on the issues of the day. Through his anthropological work, he helped his contemporaries make sense of the social flux around them.
Elected president of the American Association for the Advancement of Science in 1879, Morgan was also a member of the National Academy of Sciences.