By 2261, she had become the head of the resistance during the ongoing Earthforce embargo of Mars, which had begun the previous year when Mars' provisional government had refused to enact EA President Clark's martial law decree. Though Halloran was the nominal head of the movement, she often struggled with controlling the more extremist elements within the organization that took orders from Donovan on Earth, who had taken actions that threatened to turn the resistance into the terrorist organization that ISN portrayed it as.
She became romantically involved with Stephen Franklin shortly after he arrived on Mars later that year, when Franklin and Marcus Cole traveled to Mars to convince the resistance to ally with Sheridan to help attain their goal of independence from Earth. Later, after the capture of Sheridan by Clark's forces, her agents captured Michael Garibaldi, who had been implicated as a turncoat. Initially intent on summarily executing Garibaldi, she ordered him released when Lyta Alexander showed her that the Psi Corps was ultimately behind Garibaldi's betrayal. In November of 2261, Halloran helped arrange for thirty altered Telepaths in cryonic suspension to be smuggled aboard the fleet of Omega class destroyers that were in orbit of Mars.
After the fall of Clark's regime, Mars was granted its independence from Earth as one of the conditions for the Earth Alliance's entry into the Interstellar Alliance, since the IA charter decreed that if a significant percentage of a colony's population voted for independence, they must be freed. Tessa suddenly found herself making the transition from a relatively anonymous resistance leader to a very public person, as she was elected as a member of the Mars Provisional Government shortly after it was formed.
Within her first year on the job she quickly encountered heavy resistance from Earth, which manifested itself in the form of red tape and "bureaucratic blackmail" as she put it, believing it to be an attempt to hamstring and destabilize the fledgling government. In late 2262, she visited Babylon 5 to warn of a plot to assassinate Garibaldi and Lise Hampton-Edgars and to possibly gain some support from Sheridan in helping to break Earth's domination of Martian commerce. She got more than she bargained for when Sheridan offered to allow Mars to set up a diplomatic office on Minbar, to establish an account outside of Earth's jurisdiction. On top of this, Garibaldi offered Tessa his former position as head of ISA Covert Intelligence. Realizing she could do more for Mars in this new position than she ever could back home, she quickly agreed. Ironically, just as she found herself now living on Babylon 5, Stephen Franklin was getting ready to leave for Earth to take up his new job as Head of Xeno-biological research at Earth Dome. The two did make time to revisit their affections for one another, before they parted again.