At the outbreak of the American Civil War Smith commanded the Massachusetts and on June 9, 1861, he captured the British blockade runner Perthshire with cargo of cotton near Pensacola, Florida.

In his own words describing the havoc caused by one well-placed shot with the Massachusetts rifled pivot gun, at the CSS Selma in October 1861.

It entered the starboard side abaft the engine five feet above the water line, cutting entirely through 18 planks of the main deck, carried away the table, sofas, eight sections of iron steam pipe, and exploded in the stateroom on the port side, stripping the bulkheads of four rooms, and setting fire to the vessel ... 12 pieces of the fragments have been collected and weigh 58 pounds.

In Real Admiral David Dixon Porter's, Report to the U. S. Navy, dated January 28, 1865, from his flagship Malvern, on the Cape Fear River, in commendation of officers of his command the North Atlantic Squadron, the following was written about Melancton Smith: Captain Melancton Smith, in the Wabash, has performed his duty well.

[citation needed]After the war Smith was chief of the Bureau of Equipment and Recruiting in the Department of the Navy from September 17, 1866, to July 17, 1870.