[5] As captain of HMS Furious, he took a prominent part in the operations of the Second Opium War, and performed a piece of difficult and intricate navigation in taking his ship up the Yangtse to Hankow in 1858.

He returned to England in broken health in 1859, and at this time contributed a number of articles on naval and Chinese topics to Blackwood's Magazine, and wrote The Career, Last Voyage and Fate of Sir John Franklin (1860).

[6] During the Taiping Rebellion the Chinese government wished to regain control over Nanjing, which had been captured by the rebel forces in 1853 and declared their capital, but lacked the necessary ships to bring troops down the Yangtze River and to provide fire support.

On 13 February 1863 the "Lay-Osborn" flotilla, also known as the Osborn or "Vampire" Fleet, with seven steam cruisers and a supply ship left England, arriving in China in September 1863.

The Imperial court refused to ratify this, and Osborn resigned in pique on 9 November 1863, disbanded the flotilla, and sent the ships back to England without them having fired a shot.

[7] In 1864, he was appointed to the command of HMS Royal Sovereign, the first British turret-armed battleship, in order to test the turret system of shipbuilding.

[8] His interest in Arctic exploration had never ceased, and in 1873, he induced Commander Albert Hastings Markham to undertake a summer voyage for the purpose of testing the conditions of ice-navigation with the aid of steam.