At the start of the Russo-Japanese War, Admiral Stepan Makarov reassigned Essen to command the battleship at Port Arthur. After the disastrous Battle of the Yellow Sea, Essen also commanded the land-based defences at the entrance to Port Arthur. During the last weeks of the Japanese siege, he moved "Sevastopol" out of the relative safety of the inner harbour to use her firepower to help repulse repeated Japanese attacks. However, on hearing of the surrender of Port Arthur, he moved "Sevastopol" into deeper water and then scuttled her, making her the only battleship that the Imperial Japanese Navy could not raise after the war. He was sent as a prisoner of war to Japan, but was paroled after less than two months, and returned to St Petersburg to a hero's welcome. For his actions, Essen was awarded the Order of St. George (3rd degree) and promoted to captain.