Callaghan became commanding officer of the cruiser and commanded her in manoeuvres in Summer 1901 before becoming commanding officer of the battleship on the Mediterranean Station in December 1901. He went on to be Captain of Portsmouth Dockyard early in 1904 and commanding officer of the battleship on the Mediterranean Station shortly thereafter. He was appointed naval aide-de-camp to the King on 25 April 1904. Promoted to rear-admiral on 1 July 1905, he became Second-in-Command, Channel Fleet, with his flag in the battleship , in 1906 and commander of the 5th Cruiser Squadron, with his flag in the armoured cruiser , in 1907. Appointed a Commander of the Royal Victorian Order on 3 August 1907, he went on to be Second-in-Command of the Mediterranean Fleet with his flag in the battleship in 1908. In the latter role he assisted with the provision of aid to survivors of the Messina earthquake, which had caused the loss of circa 123,000 lives, in December 1908 for which he was advanced to Knight Commander of the Royal Victorian Order on 30 April 1909 and appointed a Grand Officer of the Order of the Crown of Italy on 15 April 1912. Promoted to vice-admiral on 27 April 1910, he became Second-in-Command of the Home Fleet, with his flag in the battleship later that month. He was advanced to Knight Commander of the Order of the Bath on 24 June 1910.