On 16 April 1862, the Confederate Navy Department, enthusiastic about the offensive potential of armored rams following the victory of their first ironclad ram CSS Virginia (the rebuilt USS Merrimack) over the wooden-hulled Union blockaders in Hampton Roads, Virginia, signed a contract with nineteen-year-old detached Confederate Lieutenant Gilbert Elliott of Elizabeth City, North Carolina; he was to oversee the construction of a smaller but still powerful gunboat to destroy the Union warships in the North Carolina sounds.

Since the terms of the agreement gave Elliott freedom to select an appropriate place to build the ram, he established a primitive shipyard, with the assistance of plantation owner Peter Smith, in a cornfield up the Roanoke River at a place called Edward's Ferry, near modern Scotland Neck, North Carolina; Smith was appointed the superintendent of construction.

Using detailed sketches provided by Elliott, the Confederate Navy's Chief Constructor John L. Porter finalized the gunboat's design, giving the ram an armored casemate with eight sloping, 30-degree angle sides.

They appealed to the War Department for an overland expedition to destroy the ship, to be christened Albemarle after the body of water into which the Roanoke emptied, but the Union Army never felt it could spare the troops needed to carry out such a mission; it was a decision that would prove to be very short-sighted.

Albemarle's projectiles consisted of explosive shells, anti-personnel canister shot, grapeshot, and blunt-nosed, solid wrought iron "bolts" for use against Union armored ships.

In April 1864 the newly commissioned Confederate States Steamer Albemarle, under the command of Captain James W. Cooke, got underway down-river toward Plymouth, North Carolina; its mission was to clear the river of all Union vessels so that General Robert F. Hoke's troops could storm the forts located there.

With the river now clear of Union ships, and with the assistance of Albemarle's rifled cannon, General Hoke attacked and took Plymouth and the nearby forts.

Albemarle opened fire first, wounding six men working one of Mattabesett's two 100-pounder Parrott rifles, and then attempted to ram her, but the sidewheeler managed to round the ironclad's armored bow.

One of the boats was lost at sea during the voyage from New York to Norfolk, Virginia, but the other arrived safely with its crew of seven officers and men at the mouth of the Roanoke.

The steam launch rode up and then over them without difficulty; with her spar fully against the ironclad's hull, Cushing stood up in the bow and pulled the lanyard, detonating the torpedo's explosive charge.

The next afternoon, he was finally able to steal a small skiff and began slowly paddling, using his hands and arms as oars, down-river to rejoin Union forces at the river's mouth.

Cushing's long journey was quite perilous and he was nearly captured and almost drowned before finally reaching safety, totally exhausted by his ordeal; he was hailed a national hero of the Union cause for his daring exploits.

Confederate commander Alexander F. Warley, who had been appointed as her captain about a month earlier, later salvaged both of Albemarle's rifled cannon and shells and used them to defend Plymouth against subsequent Union attack.

Lieutenant Cushing's successful effort to neutralize CSS Albemarle is honored by the U.S. Navy with a battle star on the Civil War campaign streamer.

She saw no active naval service after being placed in ordinary at Norfolk, where she remained until she was finally sold at public auction on 15 October 1867 to J. N. Leonard and Company.