Hobaugh received his commission as a Second Lieutenant in the United States Marine Corps from the United States Naval Academy in May 1984. He graduated from the Marine Corps Basic School in December 1984. After a six month temporary assignment at the Naval Air Systems Command, he reported to Naval Aviation Training Command and was designated a Naval Aviator in February 1987. He then reported to Marine V/STOL Attack Squadron VMAT-203 for initial AV-8B Harrier Training. Upon completion of this training, he was assigned to Marine Attack Squadron VMA-331 and made overseas deployments to the Western Pacific at MCAS Iwakuni Japan and flew combat missions in the Persian Gulf during Desert Shield/Desert Storm embarked aboard the USS Nassau. While assigned to VMA-331, he attended Marine Aviation Warfare and Tactics Instructor Course and was subsequently assigned as the Squadron Weapons and Tactics Instructor. Hobaugh was selected for U.S. Naval Test Pilot School and began the course in June 1991. After graduation in June 1992, he was assigned to the Strike Aircraft Test Directorate as an AV-8 Project Officer and as the ASTOVL/JAST/JSF Program Officer. While there, he flew the AV-8B, YAV-8B (VSRA) and A-7E. In July 1994, he went back to the Naval Test Pilot School as an Instructor in the Systems Department, where he flew the F-18, T-2, U-6A and gliders. Hobaugh was assigned to the U.S. Naval Test Pilot School when he was selected for the astronaut program.
He has logged over 3,000 flight hours in more than 40 different aircraft and has over 200 V/STOL shipboard landings.