Wisconsin career
Less than a year after the 1850 election fiasco, Vilas went west to the new state of Wisconsin and took up residence in the capitol, Madison, Wisconsin. On arriving in Madison, he initially focused on his legal practice, starting a law firm from which the present day law firm of Bell, Moore & Richter, S.C. draws its roots. Vilas quickly diversified his interests, speculating in real estate and other financial opportunities in the new state. In 1852, he was one of the chief investors, along with Leonard J. Farwell and Jairus C. Fairchild, in establishing a hotel in Madison; the hotel was constructed and opened in 1853 as the Vilas House hotel. This was an exceptionally lucrative investment, as the Vilas House became one of the principal boarding places for Wisconsin legislators when the legislature was in session.
In the summer of 1853, he was one of the witnesses called in the impeachment trial of Wisconsin circuit court judge Levi Hubbell, testifying that he had been told to pay a certain amount of money to have an injunction lifted in a case.
Vilas quickly grew in influence in Madison and resumed his political activities with the Democratic Party of Wisconsin. He was first nominated for Wisconsin State Assembly in 1853, in Dane County's 5th Assembly district, comprising Madison and the north-central part of the county. The Democratic Party in the state was divided that year, however, with the incumbent Democratic state representative Matthew Roche splitting the Democratic vote in that district; the seat was won instead by Whig Harlow S. Orton, running as an independent. Vilas ran again the next year, however, and was elected to the 8th Wisconsin Legislature. During that term, the legislature elected him to also serve as a regent of the University of Wisconsin.
Also in 1854, Vilas deployed another major investment, becoming one of the founders of the Dane County Bank, working again in partnership with Leonard J. Farwell, and was named the first president of the bank. The following year, he and Farwell were partners in establishing the Madison Gas Light and Coke Company and the Madison Hydraulic Company. During these years, he also became a contributor to the Wisconsin Historical Society and an officer in the Dane County Agricultural Society.
Vilas's first term in the Assembly led to a split between him and then-governor William A. Barstow, who wielded considerable power in the state Democratic apparatus. In 1856, Vilas sought the Democratic nomination for Wisconsin Senate in the newly-created 26th Senate district, then comprising roughly the western half of Dane County. At a spirited convention, the nomination instead went to George P. Thompson. Vilas later alleged that the convention delegates, due to loyalty to Barstow, had acted against the intent of the voters who had elected them by refusing to nominate him for state Senate. He referred to that alleged betrayal when launching an independent run for Assembly in 1858, challenging Harlow S. Orton, who was then the regular Democratic nominee. Orton won the election. Vilas's schism with the Barstow organization would leave him with little influence until the political situation was upended again by the start of the American Civil War.
In 1861, Vilas was nominated for mayor of Madison by both the Democratic city convention and the Union convention. The Republicans ultimately did not nominate a candidate to run against Vilas, and he was elected without opposition. The outbreak of the Civil War roughly coincided with Vilas's election, and his term was mostly taken up with measures to maintain the peace and security in Madison, and to manage the influx of volunteers for the Union Army. Vilas sought another term in 1862, but his renomination faced significant opposition at the Union convention in March. After a contentious session, the convention dissolved without nominating. The city Democratic convention nominated William T. Leitch, an avowed anti-war Democrat. Without official nomination, Vilas ran as an independent candidate with informal Republican support, but lost the election to Leitch. Shortly after leaving office, he was appointed to serve on the draft board for Dane County by new governor Edward Salomon.
Throughout the war, Vilas remained active in the Democratic Party. In 1865, he received the Democratic Party nomination for Secretary of State of Wisconsin. The entire Democratic ticket was defeated, however; Vilas received about 45% of the vote. Vilas was a delegate to the 1866 National Union Convention after the war, attempting to shore up the administration of Andrew Johnson. In 1867, Vilas ran for Assembly again, and was elected to serve in the 21st Wisconsin Legislature; he still represented Dane County's 5th Assembly district, but the boundaries had changed somewhat since 1855, comprising just the city and town of Madison.
Vilas ran for state Senate in the 26th Senate district again in 1869. He won the Democratic nomination, but faced lingering dissent from within his own party. In the end, he lost the general election by 110 votes to Romanzo E. Davis. Vilas won his final term in elected office in 1872, to serve in the Assembly for the 26th Wisconsin Legislature.
Though he never held public office again, Vilas remained active in Democratic politics up to just a few weeks before his death. Vilas died in Madison on February 6, 1879, after suffering from acute pneumonia. He was buried at Forest Hill Cemetery.