Choi  received a seven-year prison sentence but that was later changed to execution, to take place on August 18, 1945. On August 15, 1945, just three days before his execution date, Choi was spared execution by the liberation of Korea from Japan.

Following his release, Choi was recruited by the Kun Joon or Preparation Committee for Self Government in Seoul. In Seoul, he helped organize a student soldier party, the Student's Volunteer Group. The group later split into two groups, one advocating communism and the one Choi led that advocated democracy. In this role, Choi enrolled in a military language school, which later was to become the Korean Military Academy. At the school, Choi had a meeting with the superintendent, U.S. Army Major Reas, which led to Choi becoming one of the 110 founding fathers of the Korean Army. 

In January of 1946, Choi was commissioned as a second lieutenant in the fledgling Republic of Korea army and was posted to the Fourth Infantry Regiment in Kwang-ju, Cholla Namdo Province, as a company commander. At that time, the local police were more powerful than the Army so military personnel were frequently beaten by the police for minor offenses. When Choi became a company commander, he taught his entire company Tang-soo so they could protect themselves. Choi hated having to teach his men a Japanese style of karate, so he began his research to create a new Korean martial art. According to Choi, "I began to teach karate to my soldiers as a means of physical and mental training. It was then that I realized that we needed to develop our own national martial art, superior in both spirit and technique to Japanese karate." Choi was then promoted to first lieutenant and transferred to Tae-jon to be in charge of the Second Infantry Regiment. While at his new post, he began spreading his new art not only to Korean soldiers but also to Americans stationed there. This was the first introduction to Americans of what would eventually become known as Taekwondo.

In 1947, Choi was promoted to captain, and then to major. In 1948, he was posted to Seoul as the head of logistics and he became a martial arts instructor for the American Military Police School in Seoul. In late 1948, Choi was promoted to lieutenant colonel. In 1949, he was promoted to full colonel and in June he visited the United States for the first time, attending Advanced Military Training School at the Fort Riley Ground General School in Kansas. While there, gave public demonstrations of his martial arts skills for the troops; this was the first display of Taekyon/karate in America. Choi graduated on June 23, 1950, just two days before the Korean War started, so he had to rush back to Korea where he established the Officer Training School.

Choi later attended the Advanced Command School at Fort Benning, Columbus, Georgia. At the time, Fort Benning was called the birthplace of American Infantry Corps and parachute troops, it was a requirement for all the officers to go through it. Even Field Marshall Erwin Johannes Eugen Rommel (1891-1944) of Germany, who was called the "Desert Fox" during the WWII because of his expert command in tanks in African deserts, and attended the school.

In 1951, Choi was promoted to brigadier general. During this time, he organized the Ground General School in Pusan and served as Assistant Commandant and Chief of the Academic Department. In 1952, Choi was appointed as Chief of Staff of the First Corps and was responsible for briefing General Douglas Mac Arthur the Supreme Commander of the United Nations Troops, during the latter's visits to Kang Nung. Mac Author was visiting the front line and Choi was selected to update him on the battle situation. After the thirty minutes briefing, Choi asked the general if he had any questions. To which the general replied, "No questions; very clear." He then approached to Choi and while shaking Choi's hand asked him his name. 

At the time of armistice in 1953, Choi was in command of the Fifth Infantry Division. The year 1953 was eventful for the Choi in both his military career and in the progress of his new martial art. He authored Military Intelligence, the first authoritative book on military intelligence in Korea.

In September of 1953, General Baek Sun Yuh, the Chief of Staff of the Korean Army, asked General Choi to create the 28th Division. Choi asked General Baek if this would be  he last division created during the war? General Baek replied that one more division would be created in a few months. Choi asked Baek if he could create the last division, the 29th Infantry Division, and General Baek granted the request.

Choi organized and activated the crack 29th Infantry Division at Cheju Island off the South Korean coast. The division eventually became the spearhead of Taekkyon in the military. The first thing Choi did was to create a distinctive division flag. On the flag, the number two of the number 29, symbolized the divided Korean peninsula. The number nine symbolized a fist. The flag he thus was a fist over the Korean peninsula. After seeing the flag, people gave the 29th the nickname, "The Fist Division" or "Ik Keu Division" and later "The Taekwondo Division."

To his officers and Tangsoodo insructors, he gave very specific orders. "When the soldiers train in Tangsoodo, everyone has to bow to the instructors, regardless of military rank. Outside of the gym, salutations go according to military rank." The combination of military drills and Tangsoodo practice made this division unique among other division in the Korean Army; they were ready to fight with or without weapons.

In 1954, Choi established the academy of martial arts, "Oh-do-kwan" or "school of my way" where he taught his style of culturally-patterned Korean karate to a group of Korean Army instructors, assisted by Nam Tae Hi, his right hand man. In the latter part of 1954, Choi commanded the "Chong-do-kwan" (school of the blue wave), the largest civilian gym in Korea. He was also promoted to major general and was made the deputy commander of the Second Army in Tae-gu.