On 24 October 1941, Lützow became the second fighter pilot, after Mölders, to amass 100 aerial victories in World War II. This event was also mentioned in the ''Wehrmachtbericht+'', a propaganda+ radio report, on 25 October 1941. Fearing his loss in combat, Lützow was then grounded, an order he did not always obey. In early November, he led ''Stab'' JG 3 back to Germany to rest and re-equip. During this period, Lützow participated in the honor guard+ for ''Generaloberst'' Ernst Udet+. Udet had committed suicide on 17 November 1941 and on 1 December JG 3 received the honorary name "Udet". In May 1942 Lützow and JG 3 commenced operations near Kharkov+ before moving into the Crimea+ and operating around Stalingrad+. Lützow added one victory when he claimed a Polikarpov I-16 fighter on 21 May 1942 for his 107th kill. On 11 August, Lützow handed over command of JG 3 to ''Hauptmann'' Wolf-Dietrich Wilcke+.
According to Braatz, sometime in June 1942 (most likely in Grakowo+), Lützow was visited by two men from the SS. They were of lower rank. After Lützow asked them how he could be of assistance to them they responded by requesting as many of his men as possible to form up execution squads to liquidate Jews, Soviet Political Officers and other "scum". Lützow was furious and ordered the entire Geschwader in full dress uniform to assemble and before the Jagdgeschwader he explained what the SS had requested and how he considered this act to be barbaric and criminal. He threatened to resign from command and take off his uniform if a single soldier volunteered. Braatz speculated whether this act got Lützow into trouble with the SS and the NSDAP+.
In August 1942, Lützow was posted to the staff of ''General der Jagdflieger+'' (General of Fighters) Adolf Galland+ as Inspector of Day Fighters, Eastern Area. Braatz argues that, Galland's decision to appoint Lützow to this position may have been motivated by a desire to get him out of the "line of fire" from the SS and NSDAP. On 1 April 1943, Lützow was promoted to ''Oberst'' (colonel).