After being converted to a survey vessel, Penguin was recommissioned in 1890, and operated until 1908, when she was demasted and transferred to the Australian Commonwealth Naval Forces for use as a depot and training ship in Sydney Harbour.

[2][1] An R & W Hawthorn two-cylinder horizontal returning-rod steam engine fed by three cylindrical boilers provided 666 indicated horsepower (497 kW) to the single 13 ft (4.0 m) propeller screw.

[3] Recommissioned in 1886 for the East Indies Station, she formed part of Rear-Admiral Fremantle's Anti-Slave Trade Squadron[4] and participated in the blockade of Zanzibar in 1888 before returning to England and being paid off in 1889.

Lieutenant Boyle Somerville, one of the surveyors at this time commented: "The Naval Surveying Service has ever had foisted upon it for its work any old castaway ship that has become useless for other branches of the Navy ...

As a round-bottomed vessel, with a single (auxiliary) propeller and a rudder that was hard work for two sailors to steer, she was particularly unsuited for taking deep soundings where the ship had to be held in a steady position, sometimes for several hours.

In spite of this, the Penguin's crew made a successful sounding in the Kermadec Trench between New Zealand and Tonga.

[9] Her masts removed, she was transferred for harbour service at Sydney in 1908, before being commissioned into the RAN as HMAS Penguin, a depot ship, on 1 July 1913.