"Memphis" was commissioned on October 4, 1862, Acting Volunteer Lieutenant Pendleton G. Watmough in command. Assigned to the South Atlantic Blockading Squadron, "Memphis" sailed for Charleston and began service on October 14 with the capture of British steamer "Ouachita" bound for Havana, Cuba. She continued patrol in 1862–1863. On January 4, 1863, she joined sidewheel steamer in taking Confederate sloop "Mercury" with a cargo of turpentine for Nassau, Bahamas. On January 31, Confederate ironclads CSS "Palmetto State" and CSS "Chicora" made a dash out of Charleston Harbor into the midst of the blockading ships. Screw steamer was rammed and disabled by "Palmetto State" while sidewheel steamer was next attacked and left for "Memphis" to take in tow. The two rams then retired.