With the outbreak of the Civil War, Nichols remained loyal to the United States and was given command of the steamer USS "Winona" in the West Gulf Blockading Squadron. Nichols participated in the bombardment of forts Jackson and St. Philip, receiving the latter's surrender on April 28, 1862. He was then present with the 38-vessel flotilla commanded by Rear Admiral David Farragut during the attack on and passing of the batteries at Vicksburg, Mississippi on June 28, 1862. The USS "Winona" engaged the CSS "Arkansas" and again engaged and passed the Vicksburg batteries on July 15, 1862.